Financial Daily from THE HINDU group of publications
Monday, Dec 05, 2005
Financial Daily from THE HINDU group of publications Monday, Dec 05, 2005 |
|
|
|
|
|
|
|
Corporate
-
Mergers & Acquisitions Celebrity Fashions to buy ACL's trouser-making unit Our Bureau
Chennai , Dec. 4 THE Rs 134-crore Celebrity Fashions, the Chennai-based exporter of apparel to some of the top brands in the world, has signed an MoU with another export major, the Rs 725-crore Ambattur Clothing Ltd (ACL), to acquire its specialised trouser manufacturing plant and design studio at the Madras Export Processing Zone. The deal has been signed for Rs 80 crore. Mr V. Rajagopal, CMD, Celebrity, explaining the deal to newspersons, said that it would allow the company, on the verge of making its IPO, to scale up its capacity dramatically as it will also be acquiring ACL's customers, which includes top brands like Gap, Banana Republic and Levi's, among others. The unit, which has 4,700 employees and revenues of approximately Rs 200 crore, will add a two-shift capacity of six million trousers a year for Celebrity, which also owns the Rs 30-crore Indian Terrain brand. When the acquisition is complete by January 30, Celebrity would have a total capacity of six million each of trousers and shirts, and an employee base of 10,000. "This acquisition complements our strengths as both ACL and we supply to a similar customer profile of global brands," said Mr Rajagopal. The MEPZ unit is exempt from income-tax and indirect taxes till 2009-10. Rs 45 crore of the acquisition will be financed through the IPO. The rest, Rs 35 crore, is deferred and would be paid in three equal annual instalments. Celebrity has filed a Red Herring prospectus with SEBI to float 45.5 lakh shares. The price band is yet to be fixed. The year has seen Celebrity in some frenetic deal-making, according to Mr Rajagopal. In January, Bennett Coleman acquired a stake in the company. Later in the year, New Vernon Bharat, a venture fund, also took a stake, followed by Reliance Capital. Celebrity also acquired a unit owned by Eicher Span Designs in Chennai. It has also promoted a Rs 25-crore garment facility at Irungatokottai on the outskirts of Chennai, which will be functional in February. Post public issue, Reliance will have a 5.2 per cent stake, New Vernon 18.94 per cent, BCCL 7.3 per cent and the promoters 42.24 per cent. Mr Vijay Mahtaney, MD, ACL, said that the acquisition would help Celebrity achieve critical mass soon. He would continue to be associated with the unit to keep up comfort levels of international clients and continuity in management of the unit. ACL to diversify into hospitality
FOR Mr Vijay Mahtaney, MD, Ambattur Clothing Ltd, erstwhile owner of the ColorPlus brand, bought by Raymond, the decision to hive off the MEPZ trouser-making unit is a strategic one. The group is diversifying into the hospitality sector and plans, to begin with, to put up a Rs 250-crore 300-room five-star hotel in Chennai. He has already acquired a property in the city and has signed up with an international hotel chain to manage the hotel. He told Business Line that the group is already operating outside India in Bahrain and is close to acquiring a unit in Egypt. "We don't want to overload ourselves with capacity in India," he said. ACL is not downsizing as its acquisition in Egypt makes higher value garments. Some of the funds from the sale of the unit to Celebrity have been earmarked for the hotel project.
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page More Stories on : Mergers & Acquisitions
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2005, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|