LG Balakrishnan puts textile mill & machinery on sale
11 Aug '06
1 min read
Textile unit of LG Balakrishnan also auto parts manufacturer is being sold, which could be valued at around Rs150 million.
LGB had turned the textile mill into a wholly owned subsidiary in 2004 by acquiring the remaining shares but now is eager to discard its non-core operations.
Company wants to avoid hazards of the seasonal nature of textile industry and had decided to focus on an expansion plan in its core components business.
It wants to eliminate cash-flow disturbances that can come from an industry that demands high working capital.
This has resulted in its shares moving up by as much as 6.4 percent before easing to 0.8 percent to Rs24.35.
LGB is willing to sell its machinery, since textile machinery prices are high and many mills that are expanding their business would like to buy used machinery that is available more quickly than new ones.
Company is spending Rs900 million during the 2006-2007 period, to expand its auto parts capacity and any sale proceeds could come in handy for its expansion.
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