Bannari Amman Spinning Mills Ltd (BASML) has said that SP Apparels Ltd has evinced interest in buying its textile subsidiary, a garment factory, and Perundurai lands. The company is planning to utilise the funds from the proceeds to reduce it’s borrowings.
“The company’s board at its meeting on Saturday has taken on record, in principle, the proposals for transfer/disinvestment/sale of the company’s equity shareholding in the subsidiary and joint venture company Young Brand Apparel Private Ltd, sale of its garment unit located at Palladam Hi-Tech Weaving Park, Palladam, Tamil Nadu and sale of 6.43 acres of land with building situated at site no. R-44, SIPCOT, Perundurai, owned by the company,” it said in a filing to stock exchanges.
SV Arumugam, Managing Director of BASML, is negotiating in furtherance of the above proposals. The transaction, when finalised, is subject to necessary statutory, regulatory, and other approvals.
BASML reported a revenue of ₹1.099 crore in FY23 (₹1290 crore in FY22) and incurred a loss of ₹34 crore (as against ₹48 crore profit in FY22), mainly due to higher cotton prices and poor realisations. In H1 of FY24, it reported a total revenue of ₹508 crore and a net loss of ₹10 crore
Meanwhile, SP Apparels’ board has also approved the proposals to buy Young Brand Apparels Pvt Ltd and Palladam Garment units and 6.43 acre land in Perundurai.
Young Brand Apparels Pvt Ltd (YBAPL) is a manufacturing and export company and a strategic partner of brands focused on the intimate wear market segment. It is a joint venture company between Jacob Industries (USA) LLC, Intimark of Mexico, and Bannari Amman Spinning Mills and has a good customer base in the US. It has a state-of-the-art manufacturing facility on the outskirts of Chennai.
SP Aapparels said the acquisition of YBAPL will improve the synergies of both companies in terms of customer base. This acquisition will be a great support to its core business, the company said.