Vardhman Textiles signs JV pact with U.S. firm

Vardhman Textiles signs JV pact with U.S. firm

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Mumbai: Vardhman Textiles has signed a joint venture agreement with U.S. based American & Efird (A&E), a subsidiary of Ruddick, to manufacture and sell sewing threads for industrial and consumer markets in India and overseas, said company sources.

The U.S. firm would initially pick up 35 percent equity stake of the joint venture company Vardhman Yarns and Threads (VYTL), a subsidiary of Vardhman Textiles.

The joint venture agreement has an option to increase A&E's share in equity up to 49 percent within the next five years, it said.

The joint venture would come into effect after the VYTL board allots shares to A&E and to the company after fulfillment of specified conditions and completion of obligations by the parties to the agreement.

The company expects the joint venture accord to come into effect during April 2008.

Punjab and Haryana High Court has already sanctioned the scheme of arrangement, re-organization and de-merger among Vardhman Textiles (VTXL), Vardhman Threads (VTL), VYTL and their respective shareholders and creditors.

The company said that it has received the Court's order in this regard on March 17. The scheme provides for the transfer of the sewing thread business of VTXL on slump sale basis and de-merger of the sewing thread business of VTL to VYTL.

The scheme would become effective after the order sanctioning it is filed with the Registrar of Companies, it added. Shares of the company closed at Rs 99.45 at the BSE, 2.84 percent up from the previous close.

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