The Hindu Business Line : Mahalaxmi merges group co with self

Ahmedabad, Feb. 20 The Ahmedabad-based Mahalaxmi Rubtech Ltd (MRT),manufacturer-exporter of textile printing blankets and specialty rubber products, listed on BSE, today announced the merger of a group flagship company, Mahalaxmi Fabric Mills Pvt Ltd (MFM) with itself.

MFM is a 40-year-old textile company engaged in dyeing, printing, finishing and processing of cotton, polyester, bottom-weight, denim and other fabrics.

The processing company makes fabric for leading garment-manufacturing names like Arvind Mills and Ashima Textiles and exports home textiles to most of the major chain stores, mail order houses and supermarkets across Europe.

“We expect consolidation of the businesses to offer synergies to the company in the form of marketing, exchange of technical expertise and facility to offer more value-added products,” said Mr. Rahul Parekh, Managing Director, MRT, in a statement here. Specialty players in the technical textiles domain globally, especially in the field of rubber coated fabrics and composites, have a good market. “As a market leader in the domain in India, we believe that the merger will add up to our financial and technical strength to maximise opportunity in India and abroad.”

Consequent to the merger, MFM will become a wholly-owned unit of MRT. The merger is expected to help MRT to cross the top-line of Rs 145 crore and increase the profit to over Rs 11.6 crore for 2008-09. MRT’s turnover for FY 2006-07 was Rs. 10.01 crore and profit Rs. 86 lakh.

The paid up capital after the merger will go up to Rs. 8.82 crore from Rs. 5.17 crore. The company expects the earning per share to be over Rs. 13.16 as an impact of this merger.

As a result of this strategic initiative, MRT will have the benefit of integrated business activities. As for its textile business, the company would be able to participate in the large part of the value chain by offering finished fabric directly in the domestic and global market.

More Stories on : Mergers & Acquisitions | Textile Machinery | Gujarat

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