Garners 84 pc stake, plans merger with itself

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The cost


With the

acquisition of 49.03 per cent equity stake in IRTL, the company has spent around Rs 220.44 crore on a cumulative basis.

New Delhi, May 24

Delhi-based textile firm, Spentex Industries Ltd (SIL) said on Wednesday that it has upped its stake in Indo Rama Textiles Ltd (IRTL) to 84.02 per cent. SIL, which has appointed four of its directors on the IRTL board, said that it plans to merge the company with itself eventually.

Spentex had earlier acquired 14.99 per cent stake in IRTL's equity through stock exchange mechanism and later acquired a further 20 per cent stake through an open offer.

With the acquisition of 49.03 per cent equity stake in IRTL, the company has spent around Rs 220.44 crore on a cumulative basis.

IRTL was part of the O.P. Lohia group, which owns Indo Rama Synthetics Ltd. Spentex has appointed Mr Mukund Choudhary, Mr Kapil Choudhary, Mr Amrit Agrawal, Mr S.C. Grover and Mr S.P. Setia as its nominees on the board of IRTL.

Speaking on the proposed merger of IRTL with SIL, Mr Mukund Choudhary, Managing Director of SIL said, "The details of the merger, including the share swap ratio, will be decided by our board."

Following the acquisition, Spentex now has six plants including the Indore and Nagpur plants of IRTL.

According to Mr Choudhary, "The company now has an installed capacity of 3.51 lakh spindles, producing 6,600 metric tonnes of yarn per month."

SIL is also investing around Rs 120 crore to increase its cotton yarn capacity by 36,000 spindles at its facility in Baramati (Maharashtra).

The company is now eyeing acquisitions in overseas markets. Mr Choudhary said, "We have signed a protocol with the Uzbekistan Government for a cotton mill and are working on the details to complete the acquisition."

Spentex is also considering possible acquisitions in Egypt and other cotton producing countries, Mr Choudhary added.

(This article was published in the Business Line print edition dated May 25, 2006)
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