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Knitted garments maker SGL to buy Shyam Tex

03
May '06
New Delhi based woven garments manufacturer Shivalik Global Ltd informed that it will acquire Shyam Tex International.

Close on the heels of a successful IPO, Shivalik Global Limited (SGL) is acquiring Shyam Tex International Ltd. (STIL) for a consideration of Rs.25.69 crores.

As per the scheme, of acquistion Shivalik will acquire in the 1st phase 60% of the equity capital of Shyam Tex International at its book value of Rs.16.06 per share which entails a cash outflow of Rs.15.42 Crores.

In the Second phase Shyam Tex International would be merged with Shivalik. Shivalik Global through a stock swap deal will offer 17.13 lakhs equity shares in the ratio of one equity share of Shivalik Global Ltd for every 3.73 shares of Shyam Tex International as a consideration for the balance 40% equity of Shyam Tex International.

It would thus result in the increase of equity capital of Shivalik Global by Rs.1.71 crores from Rs.24.25 crores to Rs.25.96 crores. The merger will be effective from 01.04.2006.

Textile Company Shivalik after this acquisition of Shyam Tex International would now have the benefits of higher capacities and better economies of scale which would be available to it immediately without any gestation period.

Mores ever, the cost of expansion through this proposed acquisition of Shyam Tex International is significantly lower as compared to the original envisaged proposed expansion programme of Shivalik.

Earlier Shivalik Global, had finalized an expansion programme at its existing facilities and had proposed to set up a garment manufacturing unit near Faridabad but after this proposed acquisition of Shyam Tex International the expansion at existing facilities will not be taken up but instead the capacities that would now come under its fold through this proposed acquisition will be 145% higher in the case of knitted fabrics, 49% higher in case of dyeing and processing of knitted fabrics and 28% higher in case of dyeing, printing and processing of woven fabrics.


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