The Hindu : Business : Celebrity Fashions to sell Jwala unit

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Wednesday, Mar 12, 2008
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Celebrity Fashions to sell Jwala unit

Special Correspondent

CHENNAI: Celebrity Fashions Ltd. (CFL), a leading garment exporter, has entered into an agreement with Bangalore-based Jeans Knit Private Limited, a subsidiary of Fibre and Fabrics International Private Limited, for the sale of its ‘Jwala’ plant at Irrungattukottai, near here.

The deal has been struck for a gross consideration of Rs. 42.50 crore and is subject to approvals from the shareholders and banks of Celebrity Fashions and SIPCOT authorities. The closing date for the transaction is likely to be March 31.

The Jwala plant went commercial in January 2007 and had an annual capacity of two million pieces in a combination of tops and bottoms. The plant employs around 1,750 people.

Jeans Knit will take over the plant with all employees on a ‘going concern basis’.

CFL intends to settle the term loan borrowed specifically for the plant and a part of the working capital loan out of the sale proceeds. According to S. Surya Narayanan, Executive Director, Celebrity Fashions, the company has a term loan liability of Rs. 17 crore. The sale of the plant would help repay this and also a part of the working capital loan to the tune of Rs. 13 crore. Around Rs. 10 crore would be retained by the company to meet the future term loan obligations.

Indian Terrain is launching into the branded women’s wear segment next financial year.

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