Mumbai-based textile and apparel maker Raymond Ltd has invested Rs 5 crore ($0.8 million) in Raymond Zambaiti Ltd (RZL) to hike its stake to 52.87 per cent, as per a stock market disclosure. Post acquisition, RZL has become a subsidiary of Raymond.
RZL was an equal equity joint venture between Raymond and Italy’s Cotonificio Honegger S.P.A., (part of Gruppo Zambaiti). Last December, Raymond had terminated the joint venture agreement and had exercised its option to purchase all the shares held by the foreign partner in the firm. The latest disclosure means the previous transaction has not been completed.
However, with the stake hike, Raymond is now in the driver’s seat in the firm.
As per a disclosure by Raymond, the break-up of the JV was due to defaults committed by Cotonificio Honegger. It did not share details on the nature of the defaults.
RZL produces exclusive cotton shirting fabrics and bottom weight fabrics. Its products are supplied to shirt brands. Its manufacturing facility based in Kolhapur has an installed capacity of 21.6 million meters annually.
The gross revenue of the company for the year ended March 31, 2013 stood at Rs 296.91 crore against Rs 228.98 crore the previous year. It clocked profit after tax of Rs 3.5 crore last year, almost the same as the previous fiscal. Its margins were affected mainly by provisioning of Rs 11 crore towards dues receivable from Cotonificio Honegger.
(Edited by Joby Puthuparampil Johnson)