Mumbai: Singapore-based GIC Special Investments will invest Rs900 crore in Reid & Taylor (India) Ltd, a subsidiary of S Kumars Nationwide, a move that will help the textile major strengthen its position in the luxury fabric and apparel segment.
“The transaction provides us with a significant opportunity not only to expand the Reid & Taylor business but also offers us a chance to execute several plans that we have in mind,” S Kumars Nationwide managing director and vice-chairman Nitin S Kasliwal said.
GIC Special Investments (GIC SI) would make the investment through a fresh issue of shares and warrants, after which it would acquire up to 25.4% in Reid & Taylor (India), while the balance 74.6% stake would remain with S Kumars Nationwide.
“We plan to utilize the proceeds of the transaction for enhancing manufacturing capacity, introducing new operating lines, including adding brands that have the potential to further enrich our business portfolio,” Kasliwal added.
The proceeds of the investment would also be used for upgrading Reid & Taylor (India)’s Mysore facility. The mill has a capacity of 840,000 meters, and the capacity would be enhanced to 1,340,000 meters a year.
The transaction valued Reid & Taylor (India) at Rs3,540 crore.
Of the Rs900 crore, Rs790 crore would be received as equity at the commencement of transaction itself and the remaining Rs110 crore would be in the form of warrants, to be converted into equity shares of Rs695.18 each within 36 months.
Shares of S Kumars Nationwide were trading at Rs71.30, down 7.76% on the BSE in morning trade.