By CL Jose
KOCHI/November 13-2022: Kitex group’s ‘newsmaker’ project in Telangana is all set for a large financing from a group of banks.
A consortium led by the State Bank of India (SBI) has consented to provide Rs2023 crore funding for the expansion of Kitex Apparel Parks Ltd (KAPL), which has been established in Telangana as a subsidiary of the Kochi-based flagship company, Kitex Garments Ltd (KGL).
The other banks in the consortium are Union Bank of India (UBI), Bank of Baroda (BoB), Axis Bank and Exim Bank. According to banking sources, documentation in this regard is in progress.
While KGL holds 70 per cent ownership in the Group’s Telangana project (KAPL), the remaining 30 per cent is owned by Kitex Childrenswear Ltd, a group company where the Kitex promoters hold majority stake.
THE KGL board has extended its approval to provide a corporate guarantee to secure the consortium’s loan.
The board has explained that the corporate guarantee will be provided by the company jointly with its promoter group company – Kitex Childrenswear Ltd, in the ratio of 70:30, in line with the ownership pattern.
Kitex Garments has already subscribed to the shares worth Rs70 crore out of total investment of Rs100 crore, whereas the remaining Rs30 crore has been put in by Kitex Childrenswear, the minority partner.
However, it is learnt that Kitex Garments, being the majority shareholder in the group’s ‘face-saver’ venture, has invested an additional Rs70 crore in the project so far, thus taking its investments to Rs140 crore towards the paid-up capital of Rs200 crore.
According to available documents, the authorised capital of KAPL has been fixed as Rs750 crore.
KAPL has been established to carry on the business of textile items, such as yarn, fabrics, garments, wearing apparels made from natural or synthetic fibres or from blends of both including childrenswear, babywear, infantwear, menswear, ladieswear etc
The new company, which has a political story too behind its establishment, has been registered with Registrar of Companies (RoC), Andhra Pradesh & Telangana on November 18, 2021
KGL Q2 profit down 8 pc
Kitex Garments Ltd’s (KGL) standalone net profit for the second quarter of the current year (Q2) has dropped marginally by 8.07 per cent, from Rs27.26 crore to Rs25.06 crore.
The standalone revenue from operations for the said period was to the tune of Rs141.67 crore, down by 20.45 per cent compared with the revenue for the same period last year.
Kitex Garments still carries a very low paid-up share capital of Rs6.65 crore, though the total equity capital is at a comfortable Rs906.60 crore as of September 30, 2022.
(Credit to malayalam version appeared on myfinpoint.com)
