This story is from December 26, 2005

GHCL to buy 90% stake in Dan River USA

TNN / Dec 26, 2005, 23:53 IST

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GHCL Ltd has entered into definitive agreements through its overseas subsidiary for acquiring 90% shares or more, in Dan River USA.

MUMBAI: GHCL Ltd has entered into definitive agreements through its overseas subsidiary for acquiring 90% shares or more, in Dan River USA, the third largest manufacturer in the home textile business having a turnover of around $250 million.
The company said that the equity cost of the acquisition is $17.50 million which will be funded through the recently concluded FCCB issue proceeds, while the existing debt will be refinanced.
The acquisition process is likely to be completed by the first week of January 2006. Once the process is over, the company would have a complete control over Dan River's operations.
The acquisition enables GHCL to enter existing marketing arrangements of $250 million even before the manufacturing unit at Vapi commences operations in March 2006.

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Dan River already has its outsourcing arm in the major textile belts of Asia, such as China and Pakistan. It has a wide sales and
distribution network within the US catering to the retailers and is a preferred supplier to large retailers like JC Penny and Linen & Things, Wal-mart, Bed and Bath & Beyond.
Dan River is well-known for its own brands in high-end segments such as 'Bed In a Bag', Marquis Home Collections and also the well-known Alexander Julian, in addition to other high margin juvenile segments as well.

GHCL chairman Sanjay Dalmia said, "This acquisition provides us with an ideal opportunity to leverage Dan River's global platform and a renowned global brand in order to make GHCL a dominant player in the home textile space globally."
In India, the company is in the process of expanding its capacity in spinning from 85,000 spindles to 1,40,000 spindles over the next 24 months. It is in the process of completing the home textile manufacturing facility at Vapi at a cost of Rs 230 crore, the production for which will be commissioned by March 2006.
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At 90% capacity, the Vapi unit is likely to generate $100 million in revenues. After this expansion, GHCL would become the first company in India to have integrated production facilities for spinning, weaving, finishing to making up and would rank amongst the top three players in India in the fast growing home textiles segment.

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