The transaction involves the acquisition by KNS Shoetech Private Limited (“KNS”), a wholly owned subsidiary company of the Company, of manufacturing facilities owned by SSIPL Retail Limited (“SSIPL”). These facilities are located at:
- Khatta/Khatauni No.148/198 Khasra No. 265/101 & 267/102 kitta-2, covering an area of 05-00-00 Bigha, situated in Mohal Bangran, Tehsil Paonta Sahib, District Sirmour, Himachal Pradesh (“Bangran”).
- Khata Khatauni No’s.111/187, 35 min/54, and 35 min/56, Khasra No’s. 696/2, 2109/706, and 2108/706, situated at Mauja Bhagani, Tehsil Paonta Sahib, District Sirmour, Himachal Pradesh (“Bhagani”).
- Non-Agricultural (NA) Land bearing Nos. 17,18,9,20,22,23,24,28, 11/2/3 of Village Sersa, at Sonipat, Kundli, Haryana (“Kundli”).
These facilities are engaged in the manufacturing of shoes and open footwear, including all their components, and constitute the “Undertaking” being transferred on a slump sale and going concern basis. The completion of the transaction is subject to various conditions precedent as specified under the Business Transfer Agreement (“BTA”).
The acquisition of the Undertaking by KNS, pending transaction closure, aligns with HFL’s strategy to venture into contract manufacturing and expand its business into the production of shoes and open footwear, along with their components.
KNS has identified SSIPL’s facilities at Bangran and Bhagani in Himachal Pradesh, as well as Kundli in Haryana, as suitable acquisition targets. These facilities specialize in the manufacturing of shoes and open footwear, along with their components. HFL had previously announced its intention to invest up to Rs. 100 Crores in manufacturing shoes, alongside providing working capital for the same.
The acquisition of the Sale Business by KNS, slated for completion in the first quarter of the financial year 2024-25, marks a strategic move in line with HFL’s expansion strategy into contract manufacturing and the footwear industry. The consideration for this acquisition will be in cash only. KNS has proposed to acquire the Undertaking for a cash consideration of INR 76,92,00,000 (Rupees Seventy Six Crores Ninety Two Lakhs Only), subject to customary adjustments specified in the Business Transfer Agreement (BTA).