GHCL - More Acquisation

GHCL Acquires BEST MANUFACTURING GROUP Of USA

GHCL Ltd has announced that the Company has acquired BEST MANUFACTURING GROUP of USA for a consideration of US $ 35 million through its international subsidiary GHCL Inc.

Best is the Leading manufacturer and distributors of Home textiles and certain related items for the hospitality & healthcare sector in USA.

Best is headquartered in Jersey City, New Jersey with satellite operations strategically located across the, Canada, Mexico and Asia. The Company has two manufacturing plants, one each in Combodia and Mexico along with 8 warehouses across USA. Best Manufacturing has a top-line of about US$ 160 Million.

Total Acquisition cost of $35 million dollars being funded by existing lenders of Dan River and NOT through current cash flows of the Company. This demonstrates the confidence being developed by the lenders in Dan River.

Dan River before this acquisition, owns and operated warehousing network of 1.25 million sq. ft, in-house designing capability and also has an over 200 strong multi-sourcing team in place and has its own brands and branding capabilities. With the acquisition of BEST the current top line of Dan River will go from $250 million (including the earlier HW Baker acquisition) to a Top Line of $ 400 million dollars.

Mr. Sanjay Dalmia, Chairman of the Company said,

"Best Manufacturing's acquisition proves our (GHCL) growing acceptability of the strategy being put in place even in the most competitive home textiles market of the world-USA".

This further strengthens our position in the largest home textiles market of USA provides us with an ideal opportunity to leverage Best's global platform and a renowned global brand in order to make GHCL one of the dominant player in the Home textile space globally.

With the acquisition of BEST Manufacturing Group Dan River is the only Company in the world which will cater to the All the 3 Segments that is 1) Retail Chain in the US; 2) Hotel and Restaurant industry; 3) Hospital Industry. We are soon going to expand the operations for all the 3 sectors into other parts of the world also, so that we can service these industries globally, including our own."

"It would be ideal combination of low cost strong manufacturing base with a large established marketing platform to put us on the fast track growth".

Earlier in the month of December 2006, Dan River Inc. a step down subsidiary of the Company had acquired assets of H W Baker Lenin Co. having a turnover of US Dollar $70 million in the US through competitive bidding process for US Dollar 6.75 million.

H.W. Baker Linen Co. of USA, a leading supplier of textile products, amenities and guest room supplies to hotels and motels across USA.

Baker is a division of the Best Manufacturing Group supplying textile and non-textile products including Sheets, Terry Lenins, Blankets, Pillows, Pillow cases and amenities to some of the leading hotels in US.

With Current Clients of Dan River predominantly being the Retailers such as Walmart, K- Mart, JC Penny etc, it further added a direct client base of the Institutional segment such as Starwood, Hilton, Four Seasons, it will further extend its client base by an additional customer base of over 900 customers with the some prominent names like:

- United Airlines, Morgan Services, Admiral Linen, National Linen and Walt Diseney - In the Institutional Segment; &

- Hackensacks, Angelica, Image First and Unitex— in the Healthcare Segment.

Post these acquisitions, the process of Restructuring the Businesses will gather further momentum and the Company is in the process of taking the above structure to the Global Financial market for value unlocking for the Indian Shareholders.