Gokak textiles Limited has informed the stock exchange about a three-month delay in the completion of its knitwear manufacturing plant sale, citing process delays as the primary reason for the postponement.

Sale Timeline Extended

The textile company announced on January 27, 2026, that the proposed transaction for selling its knitwear manufacturing plant, originally scheduled for completion in January 2026, has been postponed by three months. This pushes the expected completion date to April 2026.

Plant Details and Valuation

The knitwear manufacturing facility is located at Bagalkot Road, Village Marihal, District Belagavi, Karnataka State. The plant sits on freehold land spanning 15.65 acres, including utilities, and was originally established in 1995 to cater exclusively to the export market.

Financial Performance

The knitwear business has experienced declining performance over recent years. During FY 2024-25, the unit generated turnover of Rs. 505.47 lakhs, representing 5.17% of the company's total revenue from operations. However, the unit maintained a negative net worth of Rs. 4,115.21 lakhs as of March 31, 2025.

Buyer Information

The purchaser, M/s V. G. Parekh & Co., operates in real estate development and leasing within Karnataka, with headquarters in Vijayapura. The company confirmed that the buyer does not belong to the promoter, promoter group, or group companies, making this a non-related party transaction.

Operational Changes

The company had previously relocated specialized garment manufacturing equipment, including fabric dyeing and knitting machines, to its Mills Division in Gokak Falls, Karnataka during 2015-16. Currently, only cutting and stitching operations are conducted at the Marihal facility.

The sale requires shareholder approval through a postal ballot process, as mandated under Section 180(1)(a) of the Companies Act, 2013, and compliance with regulation 37A of the LODR Regulations.

Source:

Gokak Textiles Limited has announced plans to sell its knitwear manufacturing plant in Belagavi, Karnataka, to real estate developer V.G. Parekh & Co for Rs. 19.50 Crores. The decision comes as part of the company's strategy to address the declining performance of its knitwear business in recent years.

Plant Details and Valuation

The knitwear plant, established in 1995, is located on 15.65 acres of freehold land at Bagalkot Road, Village Marihal, District Belagavi, Karnataka. As of May 15, 2025, the plant was valued at Rs. 21.49 Crores, including land, buildings, and machinery.

Financial Impact

For the fiscal year 2024-2025, the knitwear business contributed Rs. 505.47 lakhs to Gokak Textiles' total revenue, representing 5.17% of the company's operations. However, the unit reported a negative net worth of Rs. 4,115.21 lakhs, accounting for 26.02% of the company's overall negative net worth of Rs. 15,815.77 lakhs as of March 31, 2025.

Operational Changes

Gokak Textiles has already taken steps to streamline its operations. In 2015-16, the company shifted specialized garmenting machines, including fabric dyeing, knitting, and other miscellaneous equipment, to its Mills Division in Gokak Falls, Karnataka. Currently, only cutting and stitching operations remain at the Marihal plant.

Transaction Details

The sale agreement with V.G. Parekh & Co was entered into on September 09, 2025. The transaction is expected to be completed by January 2026, subject to shareholder approval through a postal ballot as required under Section 180(1)(a) of the Companies Act, 2013.

Buyer Information

V.G. Parekh & Co, the buyer, is a real estate development and leasing company based in Vijayapura, Karnataka. The company is not related to Gokak Textiles' promoter group or any group companies, ensuring an arm's length transaction.

Regulatory Compliance

Gokak Textiles has confirmed that the sale is outside the Scheme of Arrangement and that the company will comply with the requirements of Regulation 37A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations before finalizing the sale.

This strategic move by Gokak Textiles aims to address the challenges faced by its knitwear business and potentially improve the company's overall financial position. Shareholders will play a crucial role in the decision-making process through the upcoming postal ballot.