Reliance's 'Only Vimal' half sold to China's Shandong Ruyi

Reliance Industries will sell 49 per cent stake in its textile business, popularly known as 'Vimal' to China's Shandong Ruyi Science and Technology Group Co Ltd (Ruyi) to form a joint venture in India. Reliance did not reveal the value of the transaction.

Only VimalReliance Industries Limited (RIL) and Shandong Ruyi Science and Technology Group Co Ltd (Ruyi) of China have entered into definitive agreements for a joint venture in textiles.

Ruyi executed the agreement with RIL through its wholly owned subsidiary in India.

As per the agreement, RIL will transfer its existing textile business into a newly incorporated company, for which RIL will receive cash consideration.

RIL will own a majority 51 per cent in the proposed JV, with the balance 49 per cent owned by Ruyi.

The proposed transaction is subject to obtaining requisite approvals, RIL said in a release.

RIL's existing textile business is the founding business of RIL and operates under the well-known brand 'Vimal'. It has a prominent presence in the Indian textile market, especially in the worsted and synthetic suiting fabric segments.

Ruyi, a leading textile company in China with revenues in excess of $3 billion, has a global presence, including in America, Europe, Japan, Australia, New Zealand and China. Ruyi has a portfolio of world renowned brands such as 'Taylor & Lodge', 'Harris Tweed', 'Royal Ruyi China', 'Nogara Italy' and 'Indios Italy'.

The RuYi group includes the Tokyo listed Renown Inc (founded in 1902) which owns or operates several leading global brands such as 'Aquascutum', 'Simple Life', 'Ensuite', 'Mano', 'addenda', 'CHARGE', 'next eye', 'D'urban' and 'Intermezzo'.

Ruyi also operates in India under the 'Georgia Gullini' brand in the worsted suiting segment of the market. This business operation and activities would get realigned to strengthen the JV.

The JV will build on RIL's existing textile business and wide distribution network in India as well as Ruyi's state-of-the-art technology and its global reach. The JV will benefit from the strength of the 'Vimal' and 'Georgia Gullini' brands and plans to introduce some of the well-known global brands of Ruyi.

''Our joint venture with Ruyi Group will help Reliance reposition its textile business on a high growth path. Our partner's deep commitment and global reach in textile business will enable this JV to harness the growth potential of the Indian market and emerge as a global textile player,'' Nikhil R Meswani, executive director, Reliance Industries Ltd, said.
 
''With closer economic relations between China and India and Shandong Ruyi Group's expanding global presence in the textile sector, we see our joint venture with Reliance as a significant event for the group. To enter the Indian market with Reliance we truly believe in the bright future of this joint venture business,'' Qiu Yafu, chairman of Shandong Ruyi Group, said.