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The company said it expects to realise a consolidated sum of Rs 596 crore from the divestment of its business. As part of the agreement, the company will transfer its Home Textiles business for a consideration of Rs 539 crore of which fixed consideration is Rs 340 crore and balance Rs 199 crore is towards net realizable current assets to be paid by lndo Count.
In line with the group's decision of a complete divestment of Home Textiles Business, the company's US based subsidiary, Grace Home Fashions LLC has also entered into an Asset Transfer Agreement to lndo Count Global Inc., USA, a US subsidiary of lndo Count for an agreed consideration of Rs 37 crore. In addition, the Grace Home Fashions expects to realise Rs 20 crore on its own account.
Indo Count Industries is one of India's largest Home Textile manufacturer.
Explaining the rationale behind the sale, GHCL said it got an opportunity to unlock value of its Home Textiles business, not being its strategic growth area. The company believes that the sale would unlock the value for its stakeholders as the proceeds of the sale would be used to grow its core business of Chemicals. Accordingly, the company is modifying its strategy to unlock greater value for its stakeholders.
The company believes that the divestment of Home Textiles Business is a significant value unlocking exercise for GHCL and its stakeholders, which would enable GHCL to continue to focus on its strategic growth pillar, i.e., Chemical business.
RS Jalan, MD of GHCL said, "Over the last decade, Home Textiles (HT) Business of GHCL has grown to become a prominent market player in the HT sector. The sale to lndo Count promises the continuity and further growth of the HT business as they are market leaders in this particular product category. We expect this process to be seamless for our customers, suppliers, employees and other stakeholders with no disruption to our operations. GHCL plans to utilise the cash flow from slump sale of HT Business to focus on its core business, i.e., chemical and spinning business.”
GHCL expects to complete the slump-sale of HT business by the end of March 2022 subject to regulatory, shareholders and other approvals.
Shares of GHCL were trading 2.06% lower at Rs 401.90 while shares of Indo Count Industries were down 1.6% at Rs 261.70 on BSE.
On a consolidated basis, net profit of GHCL rose 30.18% to Rs 109.95 on 21.83% rise in net sales to Rs 982.59 crore in Q2 FY22 over Q2 FY21.
GHCL is a diversified group with an ascertained footprint in chemicals, textiles and consumer products segment.
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