Taking its first step towards becoming a global home textile company and to access the UK market, the B K Goenka-spearheaded Welspun India Limited has acquired an 85 per cent interest in CHT Holdings Limited, the holding company of the Britain's leading towel brand, Christy.
The overall enterprise value of Christy is Rs 132 crore (Rs 1.32 billion) and Welspun will be paying Rs 100 crore (Rs 1 billion) initially. Bank of India, which is funding the deal will pay Rs 60 crore (Rs 600 million) while the remaining Rs 40 crore (Rs 400 million) will be funded through Welspun's internal accruals.
Welspun group's vice-chairman and managing director B K Goenka, told reporters that from April 1, 2009, both the companies could exercise a put/call option, calculated upon earnings, to buy or sell the 15 per cent remaining equity presently retained by the existing Christy management.
With this acquisition, the Welspun group will gain access to the premium, high-end Christy brand as also to the UK and European markets, Goenka said. "We will also gain access to all leading retail stores in the UK for Welspun's product range including towels, bed linen and other home products," he said.
Welspun India's joint managing director Rajesh Mandawewala will be the new chairman of Christy.
