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ReturnIndia: Eastern Silk hunting for overseas buyouts
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PublishDate：
2007-12-17 15:29:00
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KOLKATA: Eastern Silk Industries, with four operational plants located in Bangalore, Mysore and West Bengal , is scouting for an overseas acquisition.
According to industry sources, the company is eyeing a French company in the home furnishings space, for which it is looking to mop up around $100 million from the overseas market. It could take the FCCB/GDR/ADR route though nothing has been finalised yet.
G Venkatesh, president, Eastern Silk Industries, however, declined to comment. “It is too early to talk. Negotiations are on and things will be finalised only when we get the right pricing.”
The company is also exploring plans to set up a Rs 200-crore textile park in Bihar and a new unit dedicated to manufacturing velvet fabric.
The location of this new plant, to be set up at an investment of Rs 60 crore, has not been finalised - it could come up within the textile park or somewhere in the south. Its fifth plant, for manufacturing made-ups, is coming up at Bommasandra near Bangalore and will go on stream by this fiscal-end.
Overall, Eastern Silk is looking at an investment of Rs 500-600 crore over the next two years.
Of this, about Rs 400 crore would be from the overseas float and Venkatesh said the company was in a position to raise up to Rs 200 crore without diluting its capital.
The company, headquartered in Kolkata, is currently only a silk player but over the next six months, it has plans to explore opportunities in cotton, blended, polyester yarn and linen.
With 95% of its revenues coming from exports, Eastern Silk is targeting a turnover of Rs 540 crore this fiscal end. Its current turnover is Rs 440 crore.
Despite the rising rupee, Venkatesh said the company has been able to hedge its export earnings by sourcing a percentage of its yarn from China in dollar terms. “About 12% of our export earnings are also in euros,” he said.
Eastern Silk’s product portfolio includes silk yarn, plain and embroidered fabrics, silk fabrics, etc.
Source:Industry Website
According to industry sources, the company is eyeing a French company in the home furnishings space, for which it is looking to mop up around $100 million from the overseas market. It could take the FCCB/GDR/ADR route though nothing has been finalised yet.
G Venkatesh, president, Eastern Silk Industries, however, declined to comment. “It is too early to talk. Negotiations are on and things will be finalised only when we get the right pricing.”
The company is also exploring plans to set up a Rs 200-crore textile park in Bihar and a new unit dedicated to manufacturing velvet fabric.
The location of this new plant, to be set up at an investment of Rs 60 crore, has not been finalised - it could come up within the textile park or somewhere in the south. Its fifth plant, for manufacturing made-ups, is coming up at Bommasandra near Bangalore and will go on stream by this fiscal-end.
Overall, Eastern Silk is looking at an investment of Rs 500-600 crore over the next two years.
Of this, about Rs 400 crore would be from the overseas float and Venkatesh said the company was in a position to raise up to Rs 200 crore without diluting its capital.
The company, headquartered in Kolkata, is currently only a silk player but over the next six months, it has plans to explore opportunities in cotton, blended, polyester yarn and linen.
With 95% of its revenues coming from exports, Eastern Silk is targeting a turnover of Rs 540 crore this fiscal end. Its current turnover is Rs 440 crore.
Despite the rising rupee, Venkatesh said the company has been able to hedge its export earnings by sourcing a percentage of its yarn from China in dollar terms. “About 12% of our export earnings are also in euros,” he said.
Eastern Silk’s product portfolio includes silk yarn, plain and embroidered fabrics, silk fabrics, etc.
Source:Industry Website
