With reference to news item appearing in leading financial daily titled “Middle East’s Al Rostamani may buy 25% stake in GHCL”, GHCL Ltd has clarified to BSE that the Company is an expanding organization and exploring growth opportunities organically and in-organically both. As a sequel to this effort, the Company keep examining various proposals for funding requirements. Any specific proposal till it is finalized cannot be commented upon.
GHCL Ltd has informed BSE that the Board of Directors of the Company at its meeting held on May 10, 2008, inter alia, has approved the following:
1. Mr. Raman Chopra, CFO of the Company, has been appointed as an Executive Director (Finance).
2. Mr. P K Laheri (Ex IAS) and Mr. G C Srivastava (Ex IRS) are appointed as Independent Directors of the Company.
GHCL Ltd has informed BSE that regarding issue, allotment and conversion of 45 lacs preferential warrants into equity shares to Oval Investment Pvt Ltd (OIPL), a promoter company, the Company have been informed by the OIPL vide its letter dated April 19, 2008 that :
(a) Court of Civil Judge Bharatpur had passed interim injunction order on April 18, 2008 restraining OIPL from conversion of warrants into equity shares;
(b) Court of Civil Judge (Sr.) Division, Noida had passed interim injunction order staying the operation of the resolution passed by the shareholders of GHCL in the EGM held on August 04, 2006 to issue and allot 45 lacs shares to OIPL.
Further the Company has informed that the Company is taking the appropriate steps in the matter meantime, pursuant to the above interim Injunction orders, the Company would not be able to take any further actions in respect of said preferential issue.
GHCL Ltd has announced that GHCL a $700 million multi product transnational Company after restructuring its business here in India is getting on with the restructuring of its USA home textiles business.
The Company is restructuring the business previously operated under Dan River, Best Textile and HW Baker under one Global B2B vehicle to pursue its vision of enhancing B2B operations.
It is creating focused verticals for its US business wherein all its institutional & hospitality businesses (supplies to hotel chains, Restaurants, Laundries, hospitals) would come under one vertical.
“As the Group is looking to enter into US retail business directly, this poses a conflict of interest with the existing retailers as the market category between Dan River and existing clients may remain the same. In the current sluggish US retail market where retailers themselves are struggling to make margins at the expense of the supplier, such a strategy reduces the attractiveness for Dan River to maintain third party relationships. We are moving away from Dan River business of supplying to Retailers on CIF basis because of the huge costs involved. Going forward we would be servicing the relationships through Fabient?s, Vapi and global sourcing units via the FOB model, as is being presently done which will require a limited set up of about 15-20 people and a saving of $ 15 to 20 million dollars on an yearly basis”, said Mr. Sanjay Dalmia Chairman GHCL.
Further, this move is in line with GHCL’s own restructuring of Soda Ash and Home Textiles, where the Home Textiles Holding Entity of GHCL will be called Fabient. As a first step, the Company is in the process of implementing the new look of Fabient across its Home Textile facilities in India which will be done during the course of this year.
Fabient would be focusing upon under-retailed markets of Eastern Europe and will also play a role in sourcing for GHCL’s Retail Foray into India. The Company would build upon the combination of its strong sourcing teams and existing vendor base in India, Pakistan and China along with the manufacturing competence in India / Cambodia and Mexico.
The US home textiles business of the Company is close to $275 million with majority contribution coming in from the global outsourcing which is close to $ 225 million. The Company expects this business to be in the region of $400 million-$500 million in about a year’s time.
Commenting on the move Mr. Dalmia said, “Our Home Textiles business vision is to clearly focus towards Global Retail in US, UK and other under retail markets, whereby Business operations in US would start realigning toward our Direct Retail and intuitional objectives.”
He added further that Rosebys sourcing which was being handled by Dan River has already been shifted to Fabient and it in talks with Global Supply Chain vendors to realign its activities toward retail.
GHCL Ltd has announced that the Board of Directors of the Company on March 24, 2008 has given in principle approval to restructure Company’s business.
As per the approved plan, the erstwhile GHCL would continue to be listed on the Indian stock exchanges housing the business of soda ash. The Home Textile business of sourcing and manufacturing is proposed to be shifted to 100% subsidiary of GHCL Ltd. The Retail entity would have the business of India & UK retail ventures. The plan envisages shifting the business of Rosebys UK to the 100% Retail subsidiary in India.
The Company at its Extra Ordinary General Meeting (EGM) held last week has approved the Employees Stock Options Scheme in supercession to earlier scheme approved in 2006. The EGM also approved the grant of Stock Options to employees of subsidiary Companies.
Speaking on the initiative, Mr. Sanjay Dalmia, Chairman GHCL Said, “This restructuring initiative would lead to creation of independently focused organizations with a potential to achieve fast growth in their individual arenas. The restructuring would provide enhanced financial flexibility to the businesses in order to independently raise resources for their future growth requirement and unlock potential valuations for the shareholders.
This initiative would get optimal valuation for the retail venture as an independently and separately listed entity along with increasing its ability to attract and retain high quality talent through implementation of ESOPs.” He added further that given the length and breath of its presence in the UK and the brands Company services within its retail outfits (from Well known established UK brands to global brands like Disney etc), the Retail entity should offer a value unlocking proposition for its shareholders.
The Company at present is in the final stages of launching its retail in Indian market through the Rosebys brand. The Company is set to launch its exclusive range of home textiles retail chain stores in the country. Effective launch of the product range is expected to roll out in early next quarter.
GHCL is the First vertically integrated player in the world in the arena of Home Textiles, from Fiber to Fashion with a set up that houses Retail capabilities backed by a Global Sourcing & Design of this scale.
The Home Textiles entity is set to become one of the strongest sourcing Power Houses in the world backed by its global network of vendors along with the sourcing teams. Company’s Global Sourcing Organisation would result in significant cost reduction in terms of manpower as well as logistics.
GHCL had acquired three companies in the USA apart from the largest Home Textiles Retail chain of the UK with more than 300 stores across UK operating under the brand name of Rosebys. The US acquisitions included Dan River, HW Baker & Best Textiles primarily catering to B2B segment. With a wide structure available under its umbrella, GHCL has been able to create efficiencies in Global Sourcing with its presence in 3 continents, and 6 sourcing hubs of the world (India, China, Pakistan, Cambodia, Turkey & Mexico). The Company has created strong Global Design Capabilities with centers in USA, EU and India and has over 40 designers worldwide in its fold along with relationships in Lifestyle licensing
GHCL Ltd has informed BSE that the Board of Directors of the Company at its meeting held on March 24, 2008, inter alia, has considered and approved the following:
1. In?principle approval for restructuring of the Company and authorization for working out detail plan of restructuring including seeking in-principle approval of stakeholders and lenders, appointment of advisors / consultants, drafting of scheme etc.
2. Publication of audited financial results for the entire financial year with in a period of three months from end of financial year i.e. upto June 30, 2008.
GHCL Ltd has informed BSE that the members at the Extra Ordinary General Meeting (EGM) of the Company held on March 19, 2008, inter alia, have passed the following special resolutions:
1. Approval of Employees Stock Options Scheme in supercession to earlier scheme approved in 2006.
2. Approval for grant of Stock Options to employees of subsidiary Companies.
GHCL Ltd has informed BSE that in the limited review report of the Company for the quarter ended December 31, 2007, the Auditors of the Company have made the following observations:
“1. The Company has restated certain foreign exchange balances at the period end date amounting to Rs 13.63 million. Hitherto, the Company did not follow the policy of restating certain foreign exchange balances. On account of this, the profit for the quarter is increased by this amount and is not comparable with the corresponding quarter’s results;
2. The Company has not made a provision in respect of deferred tax liability relating to the period ended December 31, 2007. The profit for the quarter is hence overstated by
Rs 64.84 million. A provision for deferred tax was made in the corresponding quarter ended December 31, 2006. Consequently, the corresponding quarter’s figures are not comparable to this extent.
3. The Company has not made a provision for the difference between option exercise price and the average price for stock options to be allotted to employees under the Company?s Employee Stock Option Scheme proportionately from the date of grant until the period end amounting to Rs 6.38 million. The profit for the quarter is hence overstated by Rs 6.38 million. Auditors have been informed that this will be accounted for at the accounting year end.”
GHCL Ltd has informed BSE that an Extra Ordinary General Meeting (EGM) of the members of the Company will be held on March 19, 2008, inter alia, to transact the following:
i. To grant, offer and transfer, in one or more trenches and to take all actions that may be necessary to implement the Employees Stock Option Scheme (the ESOS) including the following actions:
1. To offer and grant at any time to such permanent employees of the Company whether working in India or outside India and Directors of the Company whether Wholetime Director or otherwise (”employees”) as may be decided to be eligible by “the Board” from time to time, stock options with each option being exercisable into one equity share of face value of Rs 10/- (rupees ten only) each fully paid-up, not exceeding in aggregate 5% of the paid-up Equity Share Capital of the Company from time to time, at such price and on such terms and conditions as may be fixed or determined by the Board in accordance with the provisions of the law or guidelines issued by the relevant authority prevailing at that time;
2. To provide necessary additional funds to the Trust to purchase adequate number of Equity Shares of the Company from time to time.
3. GHCL Employees Stock Option Trust (?the ESOS Trust?) constituted for the purpose of administration and service of Employees Stock Option Scheme of the Company be and is hereby authorized to purchase Equity Shares of the Company from secondary market and transfer them to eligible employee in accordance with terms and conditions of ESOS.
ii. To extend the benefits of the “Employees Stock Option Scheme (ESOS), referred to in the resolution under item no.1 in this notice and duly passed at this meeting, also to such permanent employees of the subsidiary Companies whether working in India or out of India and directors of the subsidiary Companies whether whole time directors or otherwise, as may be decided by the Board and / or such other persons, as may from time to time, be allowed under prevailing laws and regulations on such terms and conditions as may be decided by the Board, subject to necessary provisions & approvals.