K.K. Birla Group flagship company Sutlej Textile and Industries Ltd has got approval from its Board of Directors to acquire another group company, Birla Textile Mills, which is a unit of Chambal Fertilisers and Chemicals Ltd located at Baddi in Himachal Pradesh, on the basis of a slump sale.

Slump sale is the transfer or sale of one or more undertakings for a lump sum where no values are assigned to individual assets and liabilities.

According to the filing, the Board of Directors took this decision at their meeting held on March 14 and the transaction is subject to requisite approvals.

The parties are currently negotiating and finalizing the terms of the business purchase and transfer agreement and the other related transaction documents, and shall sign these documents as soon as there is consensus. The transaction is subject to requisite approvals, the company said.

The plant of Birla Textile Mills in Himachal Pradesh has a total installed capacity of 40,320 spindles, while another 40,000 spindles were added in 2006, extending the total to 83,320, according to the company’s website. Birla Textile mills started its commercial production in May 2000.

Sutlej Textiles and Industries was incorporated in June 2005 out of a corporate restructuring exercise of Sutlej Industries Ltd and DamanGanga Processors Ltd. It has 260,872 spindles for spinning yarn, six million metres a year for apparel fabrics, 1.6 million trousers a year and 3 million metres a year for home textiles fabric. It has plants in Jammu and Kashmir, Rajasthan and Gujarat.