The Hindu Business Line : Celebrity Fashions inks pact with Jeans Knit for plant sale

Chennai, March 11 Garment exporter Celebrity Fashions has entered into an agreement with Bangalore-based Jeans Knit Pvt Ltd, a subsidiary of Fibre and Fabrics International Pvt Ltd, for the sale of its Irrungattukottai plant, Jwala. The deal has been struck for a gross consideration of Rs 42.50 crore and is subject to approval from the shareholders and bankers of Celebrity Fashions and SIPCOT authorities.

The closing date of the transaction is likely to be on March 31. While Avendus Capital of Mumbai is representing Celebrity Fashions (CFL), Yes Bank is representing Jeans Knit for the deal, says a press release from CFL.

The Jwala plant commenced its commercial operations in January 2007 and has an annual capacity of 2 million pieces. The plant employs around 1,750 people and Jeans Knit is said to take over the plant with all employees on a going concern basis.

Exports hit

CFL intends to settle the term loan borrowed specifically for the plant and a part of the working capital loan out of the sale proceeds. The Rs 350-crore Celebrity Fashions with a domestic brand under the name Indian Terrain, claims that dollar depreciation and recession in the US market has hit its export division at large and the division has been reporting losses for the past six quarters.

With experience in supplying to international brands, CFL sees retail expansion as a turnaround strategy for its business, the release adds.

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