Spentex Prepares To Acquire Indo Rama Textiles

Following its initial acquisition of nearly 15 percent of India-based Indo Rama Textiles Ltd.
(IRTL), Spentex Industries Ltd. — also based in India — is increasing its stake in the company in a
bid to buy out the firm. Spentex plans to spend 1.84 billion rupees to acquire a further 70-percent
stake in the company.

“We have entered into the share purchase agreement to purchase a 50-percent stake from the
promoters of Indo Rama Textile at 84.15 rupees per share,”said Mukund Choudhary, managing director,
Spentex. Choudhary added the company was poised to make an open offer to other shareholders to buy
an additional 20-percent stake in the company.

IRTL’s two plants produce close to 40,000 metric tonnes of spun yarn per year including
polyester, viscose, and polyester/cotton and polyester/ viscose blends. Spentex specializes in the
production of combed cotton yarns in counts ranging from 26 to 40 Ne. The acquisition allows
Spentex to offer a full range of natural and man-made yarns to its customers, and is expected to
make it one of the top yarn manufacturing companies in India.

“Our intention is to merge Indo Rama Textiles into Spentex and the board has given me
in-principle approval to work on it,” Choudhary said.

March/April 2006