Spentex acquires Uzbek's TTTL for $81 million

By Staff
|
Google Oneindia News

New Delhi, July 24 (UNI) Barely two months after acquiring Indo Rama Textiles Ltd, Spentex Industries Ltd (SIL) today announced acquisition of Uzbekistan's state-owned Tashkent To'yetpa Tekstil LLC (TTTL) for a consideration of 81 million dollars, payable over four years.

''Spentex has acquired TTTL, a government-owned spinning company in Uzbekistan -- the second largest exporter of cotton in the world,'' SIL Managing Director Mukund Choudhary told reporters here.

Spentex has formed a subsidiary Spentex Tashkent Toytepa LLC in Uzbekistan.

The transaction, which happens to be the first FDI by an Indian company in Uzbekistan, comprises acquisition of two manufacturing facilities located in the cities of Tashkent and To'yetpa, which are considered as the largest yarn manufacturing facilities in the Central Asia with an installed capacity of 220,000 spindles and a weaving capacity of 236 air jet looms.

Under the deal, Spentex has been given a number of incentives, including 15 per cent discount on raw cotton, exemption on corporate taxes, custom duties and VAT, as Uzbek government is keen to attract FDIs. Spentex would invest 12 million dollars in the companys subsidiaries to fund the initial equity contribution.

Mr Choudhary said 100 per cent of produce from TTTL will be exported worldwide but India.

Following these acquisitions, the company expects ''big growth'' in Q3 and Q4 of current fiscal. ''You will find a big differnce (in the bottom line of the company) after the consolidation of all the acquisations,'' he said.

''We are also under expansion mode,'' he said, disclosing that the Baramati unit of the company is being expanded by 36 thousand spindles, Ahmedabad unit by 55 thousand spindles and Solapur by 50 thousand spindles, which will be running with full capacity by October this year. Other three factories of SIL are operational in Kolhapur, Nagpur and Indore.

This expansion and the acquisition of TTTL will take the number of company's spindles up to 570,000 (350,000 in India), as against 56,000 spindles last fiscal, he informed.

Asked about other such ventures, the SIL MD said ''As a company's inorganic growth strategy we will keep exploring opportunities for acquisitions that will be beneficial to our share holders.'' ICICI Securities was the SIL's sole strategic advisor on the transaction.

SIL, a textile arm of CLC Group, had recently taken over Indo Rama Textiles Ltd and Amit Spinning Industries Ltd.

UNI VJ PV BD1652

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