Spentex acquires Tashkent Toyetpa Tekstil LLC, Uzbekistan

Mumbai, July 24 (UNI) Spentex Industries has acquired the business of Tashkent-Toyetpa Tekstil Ltd (TTTL), a state owned spinning company in Uzbekistan for a consideration of USD 81 million.

Announcing this to BSE, the company said the consideration of USD 81 million would be payable over a period of 4 years.

Spentex would invest USD 12 million in the companys subsidiaries to fund the initial equity contribution.

Under the terms of the agreement, the transaction comprises acquisition of two manufacturing facilities located in the cities of Tashkent and Toyetpa. These two state-of-the-art plants are the largest yarn manufacturing facilities in Central Asia with an installed capacity of 220,000 spindles and a weaving capacity of 236 air jet looms.

The acquisition is in line with Spentex inorganic growth strategy.

The company would gain access to the east European markets and would also be able to source high quality cotton locally. It would also be able to enjoy labour economies and low power cost.

The transaction has been made under the privatisation programme of government of Uzbekistan. The government of Uzbekistan has given the company a number of incentives including 15 pc discount on raw cotton, exemption on corporate taxes, customs duty and VAT.

This acquisition catapults Spentex as Indias largest spinning enterprise with an installed capacity of over 570,000 spindles. The company has formed a subsidiary Spentex Tashkent Toytepa LLC in Uzbekistan.

ICICI Securities was the sole strategic advisor on the transaction.

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