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Hanung cuts overseas acquisition plan over meager funds

18
Sep '08
Hanung Toys and Textiles Ltd, a leading toy and textile maker has clipped its overseas acquisition plans on grounds of tight availability of funds.

Based in New Delhi, the company was initially in talks for acquisition of three overseas firms in deals worth US $30 million but it now plans to acquire only two companies.

In an exclusive interview with Fibre2fashion, Mr Sushil Vij, Vice President of the company stated, “Earlier we had planned for acquisition of 3 companies, 1 Soft Toy Company (Toys Company) from China with 100 percent stake and two others from the US. But presently, we are only considering one of the prospects from the US - Front End Furnishing Company- with 51 percent stake while one more is kept on hold. Since MoU has been signed with a Chinese company, both the projects are expected to make a kick-start from December this year.”

Hanung Toys and Textiles will spend a total of $20 million on the two projects of which $15 million would be expended on the Chinese deal and the remaining $5 million for the US one.

It is believed that with the acquisition of the Chinese firm, Hanung Toys would be able to boost its capacity of toy-making and increase its share of revenue to that of textile, which presently makes a 60 percent contribution. Over 70 percent of the fund is likely to come in as loans from an Indian bank and the two deals are expected to add to the revenue from the first quarter of 2010.

Fibre2fashion News Desk - India


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