The move comes after the overseas subsidiary made huge losses during the last fiscal due to cheap imports and declining consumer demand.

The divestment deal was signed in March this year immediately after the company received necessary approvals from the Reserve Bank of India. The continuing losses with no prospect of any upturn would have wiped out the networth of the company, a top Raymond official said.

The whole process was complete within two months of the company taking the decision to divest as no approvals were necessary due to Kenya's free convertible currency regime.

Initially started as a textile firm under the name of Raymond Woollen Mills (Kenya) Ltd, the company has been in existence for over 25 years. It changed the nameto Heritage Wollen Mills during this period.

The economic recession that hit Kenya around five years ago took a heavy toll on the company's operations with losses mounting to a massive 197.18 million shilling on a turnover of 50 million shilling. Raymonds was finally forced to make an exit due to rising interest rates, company officials said.

The local partner, which had a minority stake, was keen on buying out Raymond's holding in conjunction with the state development corporation last year. The buyout makes sense for the local partner as it was more in tune with the business climate in Kenya. The increasing presence of second hand textile products makes it impossible to generate demand, the official said.

The company's other overseas subsidiaries like Jakayorg AG and JK England has made profits over the last year. While Jakayorg made a net profit of 0.41 million SFR during the last yuear, JK England has reported a profit of 20,817.

The Raymond board has decided to accept an offer from thecollaborators of Raymond Calitri Denim Ltd (RCDL) , the company's denim making subsidiary, to acquire 1,25,00,000 shares of Rs 10 each. This will result in RCDL becoming a wholly-owned subsidiary of Raymond Ltd.