Filatex Fashions Limited (FFL), a BSE-listed socks manufacturer, is picking up 51 per cent stake in Sri Lankan apparel manufacturing company Isabella (Private) Ltd for about $7.55 million (approx Rs 60.40 crore)
“The due diligence is on. We are hoping to be completing the whole process in the next two months,” Prabhat Sethia, Managing Director of FFL, told businessline.
He said the acquisition would give it access to some European markets where Isabella has operations.
The company will go for a preferential issue to part fund the acquisition. “We will use internal accruals to meet the total fund requirements,” he said.
“We are planning to raise our paid-up capital to ₹250 crore from ₹48 crore by way of preferential allotment of shares at various price bands. This will enable us to raise about ₹400 crore,” he said.
He said the company was in the process of expanding its capacity to produce 30 million socks a year from the present capacity of 7 million.
“We are investing about ₹350 crore for our expansion plans, which include foraying into track suits and t-shirts. We are importing 500 machines for our socks business,” he said.
It is planning to hire about 1,700 employees to support the expanded capacities, he said.
About 80 per cent of the socks that the company’s produces is white-labeled for some global brands.