Alok Inds to pick up 60% stake in Czech co
Textiles company Alok Industries has signed a memorandum of understanding (MoU) with Mileta International of Czech Republic to acquire 60% stake for e13.97m. Alok has retained the rights to buy 19.6% more in Mileta depending on the fulfilment of certain terms and conditions.
Mileta International makes shirting fabrics, batistes and voiles, table and bed linen and handkerchiefs. It posted an operating profit revenues of e11m in the six months ended June 30, ’06 with an operating profit of e0.84m.
Under the terms of the agreement, Alok Industries will own all Mileta brands , including Mileta, Erba, Cottonova, Lord Nelson, Wall Street, Osaka and Erbelle as well as Mileta’s licensee rights of Daks for handkerchiefs. Alok will become a sourcing base for Mileta’s products globally.
Mileta will move 25% of its manufacturing and all of its sewing activities to India, while a large chunk of its manufacturing will remain in the Czech Republic. Mileta will also provide design inputs and marketing inputs to Alok, besides providing training and technology support.
Explaining the rationale behind the acquisition, Dilip Jiwrajka, MD, Alok Industries, said: “Mileta’s main strength is its design capabilities and technology. Also it is an established company with many international customers. Moving the manufacturing from the Czech Republic to India will help the company reduce cost.”
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