Indian Rayon has bagged the garments business of Madura Coats. The deal has been done at Rs.2.36 bn.
Indian Rayon thus becomes the owner/licensee for India of the prominent brands Louis Phillipe, Van Heusen, Allen Solly, Byford, Peter England and San Frisco. A fully owned overseas subsidiary of Indian Rayon, Aditya Vikram Global Trading House will be acquiring the exclusive brand rights for various countries in SAARC and Middle East countries from Coats Viyella plc for $ 10.8 m.
At present, Indian Rayon has three businesses: viscose filament yarn, carbon black and insulators. The cement business of the company was amalgamated with Grasim during the last financial year. Along with that, Grasim took up Rs. 4.37 bn of debt from the books of Indian Rayon as cement related debt. Besides, Indian Rayon has closed down its sea water magnesia business. It will be writing off Rs. 3 bn in the current year on account of this division from its past reserves. In FY2000 it is expected to report a turnover in the range of Rs. 12 bn and a net profit in the range of Rs. 1 bn without taking into account the turnover of the newly acquired garments division.
Madura Coats, on its part, is likely to focus only on its thread and its industrial fabrics business. There are rumours that the textile mill in Madurai would be closed after paying off a hefty VRS to its workers. Any surplus could be used to repay its borrowings. The company has long term borrowings of Rs.720 m of which the foreign currency borrowings amount to Rs.600 m.
Coats and Viyella had earlier announced a de–merger in the UK, which had run into regulatory problems. Madura Coats is a 51% subsidiary of the former and the brands of Viyella plc were licenced to the company till 2004.
More Views on News
Sorry! There are no related views on news for this company/sector.
LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India. Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: firstname.lastname@example.org. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407