"SP Apparels Acquires Textile Arm and Garment Unit of Bannari Spinning Mills"

In a strategic move aimed at streamlining operations and reducing borrowings, Bannari Amman Spinning Mills Ltd (BASML) has announced that SP Apparels Ltd has expressed interest in acquiring its textile subsidiary, a garment factory, and a parcel of land in Perundurai. The proposed transaction, disclosed in a filing to stock exchanges, is part of BASML's plan to utilize the proceeds from the sale to alleviate its existing borrowings.

The BASML board, during a meeting on Saturday, formally acknowledged the proposals for the transfer, disinvestment, or sale of the company's equity shareholding in the subsidiary and joint venture company Young Brand Apparel Private Ltd. The plans also include the sale of BASML's garment unit located at Palladam Hi-Tech Weaving Park in Tamil Nadu and the sale of 6.43 acres of land with a building situated at site no. R-44, SIPCOT, Perundurai.

SV Arumugam, Managing Director of BASML, is currently in negotiations to finalize the proposed transactions, subject to necessary statutory, regulatory, and other approvals.

BASML reported a revenue of ₹1.099 crore in FY23, a decrease from ₹1290 crore in FY22, attributed to higher cotton prices and poor realizations. The company incurred a loss of ₹34 crore in FY23, in contrast to a ₹48 crore profit in FY22. In the first half of FY24, BASML recorded a total revenue of ₹508 crore and a net loss of ₹10 crore.

Simultaneously, SP Apparels' board has approved its own proposals to acquire Young Brand Apparels Pvt Ltd and Palladam Garment units along with the 6.43-acre land in Perundurai. Young Brand Apparels Pvt Ltd is a joint venture between Jacob Industries (USA) LLC, Intimark of Mexico, and Bannari Amman Spinning Mills, with a focus on the intimate wear market segment. SP Apparels sees this acquisition as a strategic move to enhance synergies between the two companies, particularly in terms of customer base, providing significant support to its core business.

HBL