Jeantex Group buys majority interest in Romanian outfit
25 May '06
2 min read
Jeantex Group Inc, a company engaged in the design, development, manufacturing, and marketing of consumer products for the apparel markets worldwide, has signed a stock purchase agreement to acquire 51 percent of Eurotex Spalatorie Textile, a Romanian industrial washing company located in Sibiu, Romania, to open up distribution networks in Romania, Kazakhstan, Bulgaria, former States of Yugoslavia, Moldova, Ukraine, the Russian Federation, and the EU countries.
According to the agreement, Jeantex Group will acquire 51 percent of Eurotex in exchange for $80,000 in cash and $120,000 worth of restricted stock of the company based on the 20-day closing average prior to the closing date. The closing of this transaction, scheduled to take place on June 30th 2006 but no later than July 15th 2006, is subject to further satisfactory due diligence review of Eurotex by Jeantex Group and the approval of the Board of Directors of the company.
As Romania is entering the EU in 2007, Jeantex Group believes it may enjoy significant benefits from these Romanian operations, including tax breaks from 39 percent to 80 percent from import taxes in the EU, low corporate tax of 16 percent, low labor costs, easy access to Russian Federation, Ukraine, Moldova, and all other Slavic states, and established distribution network available to Eurotex. Besides its own industrial washing facilities, Eurotex has the capacity to expand into the production of jeans to meet the market needs in this region.