Coimbatore-based Bannari Amman Spinning Mills Limited (BASML), known for its textile manufacturing of cotton yarn, woven and knitted fabrics, has revealed SP Apparels Ltd’s keen interest in acquiring its textile subsidiary, a garment factory, and lands in Perundurai. The intended purpose behind this potential sale is to channel the proceeds toward debt reduction.
Amidst fiscal challenges, BASML faced a decline in revenue from Rs. 1,290 crore in FY ’22 to Rs. 1,099 crore in FY ’23, coupled with a shift from a profit of Rs. 48 crore to a loss of Rs. 34 crore, primarily due to elevated cotton prices and subdued realisations. The first half of FY ’24 witnessed a total revenue of Rs. 508 crore and a net loss of Rs. 10 crore. Simultaneously, SP Apparels, in its pursuit of expansion, greenlit the acquisition of Young Brand Apparels Pvt Ltd., (YBAPL), Palladam Garment units, and a 6.43-acre land parcel in Perundurai.
YBAPL, a joint venture between Jacob Industries (USA) LLC, Intimark of Mexico, and Bannari Amman Spinning Mills, stands as a significant manufacturing and export entity focusing on the intimate wear market segment. Renowned for its strategic partnerships and customer base in the US, YBAPL operates a manufacturing facility situated on the outskirts of Chennai.
Under the leadership of SV Arumugam, Managing Director of BASML, negotiations continue in pursuit of these prospective agreements. However, the finalisation of these transactions remains contingent upon obtaining requisite statutory, regulatory, and other mandated approvals. SP Apparels anticipates that the acquisition of YBAPL will foster enhanced synergies between the entities in terms of clientele, strengthening their market positioning and bolstering SP Apparels’ core business.
