Companies

TT plans to sell two ginning units

Suresh P. Iyengar Mumbai | Updated on March 17, 2011 Published on March 17, 2011


TT Ltd, an integrated textile and garment producer, plans to sell off its two ginning at Gondal and Rajula in Gujarat to fund its Rs 150-crore expansion plans and reduce debts.

Mr Sanjay Kumar Jain, Joint Managing Director, TT Ltd, said the company is in the final stage of negotiation with the buyers and expect to close the deal in April.

“We plan to repay some of our debt and bring down our liability by at least Rs 15 crore after sale of the assets,” he said. The company has a long term debt of Rs 120 crore.

Besides sale of assets, the company, if necessary, will also look at raising Rs 30-40 crore through equity placement. “Nothing has been finalised on the equity placement as of now. But it will be considered if need be at the final stage,” he said.

The decision to sell off the ginning assets comes on the back of the company's strategy to be known as a fibre-to-fashion.

investments

TT will invest Rs 100 crore to set up a unit of 35,000 spindles and Rs 15 crore in a wind energy project in Gujarat. It will enhance garment making capacity with an investment of Rs 30 crore at Avinashi. The company will also invest Rs 5 crore to set up a poly propylene yarn making facility in Uttar Pradesh.

The company expects contribution of revenues from garments to increase from Rs 80 crore to Rs 150 crore in the next fiscal with the launch of new products, affordable price and value-added organic cotton products.

Given the buoyancy in the textile sector, the company is confident of achieving a turnover of Rs 475-500 crore this fiscal against Rs 350 crore logged last year.

“Despite the high yarn prices, we expect the garments to register a growth of 50-60 per cent next fiscal as aspiration for quality products among the younger generation increases,” said Mr Jain.

Pact with china

The company has recently signed an agreement with a Chinese company to supply textile products worth Rs 45 crore ($10 million). “We have discussed a much larger co-operation with the Chinese company and expect to do a business of over $20 million,” said Mr Jain. TT explores the possibility of selling cotton-based items such as fibre, yarn and fabric to China in the coming years. It is also planning to explore options of importing synthetic-based textile products where China has a competitive edge over India, he said.

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Published on March 17, 2011
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