By CL Jose
KOCH/March 11-2022: The Telangana project announced by Sabu Jacob, the managing director of Kitex Garments Ltd (KGL), has crossed a significant phase with the KGL board having given the go-ahead to raise up to Rs200o crore for the project.
In a filing sent to the stock markets following the board meeting on today (March 11), the company said it will seek “the shareholders’ approval a) to give loan to any person or body corporate; (b) give any guarantee or provide any security in connection with a loan to any other body corporate or person and; (c) acquire by way of subscription, purchase or otherwise the securities of any other body corporate, from time to time, in future, which shall not exceed a sum of Rs 2000 crore.”
The approval of the shareholders of KGL will also be sought with regard to a corporate guarantee for the newly incorporated subsidiary – Kitex Apparels Park Ltd (KAPL). KGL said the newly formed KAPL will see investments to the tune of Rs750 crore. While the paid-up capital of the parent company, KGL, is Rs6.65 crore, the total equity as of March end, 2021 was at Rs735.19 crore.
Telangana project
The idea of Telangana project was arguably triggered by a face-off between Sabu Jacob and the ruling Left Government under Pinarayi Vijayan emanating from a ‘long-simmering political difference’, according to sources in the know of political equations in that region.
In September last, Kitex group and the Telangana government signed an MoU for setting up two integrated fibre-to-apparel manufacturing clusters in the southern state. The Kitex group, which earlier announced plans to invest Rs1,000 crore in an apparel park in Warangal, would now invest Rs2,400 crore in Telangana.
According to media reports earlier, work on both the clusters will commence without much delay. While one cluster will be based in Kakatiya Mega Textile Park in Warangal, the other will be set up at Sitarampur in Rangareddy district.
