Sarla Performance Fibers Limited has informed the Exchange regarding 'Chairman & Managing Director Note - Mr. Krishna Jhunjhunwala, Chairman and Managing Director of the Company (DIN: 00097175) - communication to the Shareholders of the Company'.
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Sarla Performance Fibers has divested its investment in preference shares of its wholly owned US subsidiary, Sarlaflex Inc., which had suspended manufacturing operations in December 2017 due to prolonged underperformance and negative net worth. The company recognized a loss of ₹7,713.26 lakhs from this transaction. The actual cash impact is minimal at ₹111.59 lakhs received as sale consideration, as the loss is largely a non-cash accounting adjustment. The management expects this strategic exit to improve Return on Capital Employed (ROCE) and strengthen the balance sheet by removing legacy non-productive assets.
This divestment is accounting-heavy with limited cash impact, but removes a long-standing loss-making entity from the books. Shareholders may view the clean-up positively as it allows management focus and capital to redirect toward core business and high-growth export segments.