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Thursday, Nov 11, 2004

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Rajasthan Spinning to buy 60% in Jaipur Polyspin

Our Bureau

Kolkata , Nov. 10

THE Rs 670-crore Rajasthan Spinning & Weaving Mills Ltd, an integrated player in the textiles sector, on Wednesday announced the acquisition of Jaipur Polyspin Ltd, a synthetic yarn producing company.

Jaipur Polyspin belongs to the Kolkata-based Dhunseri Group owned by Mr C.K. Dhanuka.

The production unit of Jaipur Polyspin is situated at Ringas in Rajashtan and is equipped with 23,040 ring spindles.

A notification to the stock exchanges states that Rajasthan Spinning is acquiring 59.6 per cent stake in Jaipur Polyspin.

In terms of quantity, it is buying 3.70 million equity shares at Rs 29 per share. The total cash outgo will be Rs 10.7 crore.

Apart from the Rs 10.7 crore, Rajasthan Polyspin, the flagship company of LNJ Bhilwara Group, will also pay the Dhanukas another Rs 2.53 crore as "non-compete fee".

Rajasthan Spinning also announced that it would make a subsequent open offer of another 20 per cent equity of Jaipur Polyspin, following which, Rajasthan Spinning would hold 80 per cent in Jaipur Polyspin.

Rajasthan Polyspin further stated that it would integrate the operations of Jaipur Polyspin with itself on a longer term.

During the last one week, the Rajasthan Spinning counter witnessed huge activities. Market sources said that everyone was expecting this acquisition announcement.

Textile industry sources said Rajasthan Spinning is a market leader in blended yarns and has a 12 per cent market share. With a capacity of 5,000 tonnes per month, it is the largest producer of polyester viscose in India.

More Stories on : Mergers & Acquisitions | Textiles

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