Kolkata, Aug. 22
THE Rs 525-crore Sutlej Industries Ltd, a member of the K.K. Birla Group of companies, has decided to transfer all its textile activities into a wholly owned subsidiary, which has been named Sutlej Textiles and Industries Ltd.
This decision was taken by its board of directors at a meeting on Monday. The board has also decided that one share of Sutlej Textiles and Industries would be given to the shareholders for every one share of Sutlej Industries.
The appointed date for the scheme to come into effect has been fixed for July 1, 2005. The valuation was done by N.M. Raiji & Co and the fairness opinion was provided by Ernst & Young.
At present, Sutlej Industries has three factories located in Rajasthan, Jammu and Gujarat. For the year ended March 31, 2005, the company registered a turnover of Rs 525 crore against Rs 517 crore in the previous year. The company's net profit was Rs 16 crore.
Meanwhile, sources said Sutlej Industries had planned to enter the readymade garments and home furnishings business by the end of the current calendar year. It is also learnt that the company has appointed Ernst & Young to advise on its organisational and corporate restructuring.
Sutlej Industries is mostly into spinning and weaving of cotton, synthetic and blended yarn. It is doubling its capacity from 85 lakh metre per year to 170 lakh metre. Sources said the expansion programme would cost around Rs 65 crore.
Sutlej Industries is managed mostly by Mr Chandra Sekhar Nopany, grandson of Mr K.K. Birla and son of Ms Nandini Nopany. Mr Nopany is the Vice-Chairman of the company.
Three other Birla factions led by Mr Aditya Birla, Mr B.K Birla and Mr S.K. Birla are already in the readymade garments business in a big way. Their companies are Grasim, Century and Birla VXL, respectively.