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RSWM acquires 48.17% stake in Cheslind Textiles

20 Mar '07

4 min read

Cheslind Textiles is a cotton yarn manufacturer and has a 64,512 spindle operation based out of Bangalore. For 9MFY2007 Cheslind Textiles reported revenues of Rs. 943.3 million and EBIDTA of Rs. 149.1 million. As on 31 December 2006 the total long-term debt on the books was about Rs. 480.0 million, out of which Rs 400 million is under TUF.

ICICI securities were the advisors to RSWM for this transaction. The transaction is subject to the necessary statutory approvals that may be required by RSWM Ltd. and Cheslind Textiles Ltd.

Commenting on the acquisition, Mr. Riju Jhunjhunwala, Joint Managing Director, RSWM Limited, said:
“We are delighted to have concluded the transaction at an attractive investment level and it will augment our size, product mix and geographical presence. We remain positive on the outlook for the yarn sector going forward and such an initiative demonstrates our intentions to continually grow this business.”

“This acquisition helps us increase our capacities at an accelerated pace. Our cash-flows from continuing operations remain firm and will be even stronger once our thermal power plant goes on stream in the next quarter. Our debt requirements for already announced capex plans have been tied up and we have comfortable headroom on our balance sheet to fund this acquisition out of internal accruals.”

“Our growth charter is clear and aggressive, going forward we will continue to implement initiatives that support longer-term growth.”

Commenting on the acquisition Mr. Rohit Gulati, Vice President, ICICI Securities Ltd. says that, “The fundamental drivers of the transaction are the synergies that CTL brings to RSWM. Along with capacity expansion, there is a diversification in the product portfolio as well. The presence of RSWM in the international market will be further strengthen with an enhanced product range with entry into the fine cotton yarn segment.”

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