GHCL announced that it entered into a business transfer agreement for divestment of its Home Textiles business to lndo Count Industries.
The company said it expects to realise a consolidated sum of Rs 5.96 billion from the divestment of its business.
As per the deal, the company will transfer its Home Textiles business for a consideration of Rs 5.39 billion of which fixed consideration is Rs 3.40 billion and balance Rs 1.99 billion is towards net realizable current assets to be paid by lndo Count.
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 370 million. In addition, the Grace Home Fashions expects to realise Rs 200 million on its own account.
Indo Count Industries is one of India’s largest Home Textile manufacturer.
GHCL said it got an opportunity to unlock value of its Home Textiles business, not being its strategic growth area. The company will 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.