Spentex Industries acquires Uzbekistan firm for $81 mln

New Delhi, Aug 21 (UNI) Spentex Industries today said it has acquired the Uzbekistan-based spinning firm Tashkent To'ytepa Tekstil, at a consideration of 81 million dollars payable over a period of four years.

The transaction comprises acquisition of two yarn manufacturing facilities located in the cities of Tashkent and To'ytepa, with a combined installed capacity of 220,000 spindles and a weaving capacity of 236 air jet looms, a company statement said.

The Government of Uzbekistan has agreed to give a number of incentives to the company in lieu of its investment in Uzbekistan economy which include 15 per cent discount on raw cotton, exemption on corporate taxes, customs duty and VAT.

This comes as part of the privatisation programme of the Republic of Uzbekistan. With this, the company has become India's largest spinning enterprise with an installed capacity of over 570,000 spindles, Spentex Industries is funding the transaction through a combination of internal accruals, equity funding by Citigroup in the special purpose vehicle set up in Netherlands and borrowings from ICICI Bank.

ICICI securities acted as the sole strategic advisor of the company on the tie-up.

This change of control follows a successful bidding process amidst competition from domestic, Turkish and Korean players.

This transaction is shareholder value accretive and would enable the company to emerge as a leading textiles enterprise in the next few years.

This deal is the first direct investment by an Indian company into the Republic of Uzbekistan as well as the largest foreign direct investment (FDI) in textile industry in Uzbekistan in recent times.

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