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Arijit De & Raghu Mohan
Mumbai, July 28: Voltas, as part of an ongoing restructuring, has exited from its joint venture with German multinational SMS Schloemann Siemag AG. The diversified Tata group major has divested its entire 49 per cent stake in SMS India in favour of the German partner.
Voltas will receive Rs 4.8 crore in lieu of the stake against a total investment of Rs 3.67 crore in the venture.
The joint venture company was promoted in March 1994 to manufacture, design and install machines for steel-rolling mills. Voltas has said that the venture did not fare well, ever since its incorporation, owing to long gestation period of contracts, and unremunerative prices for large projects."After carefully examining the position, the board has decided to opt out of the joint venture as a co-promoter of SMS India," is Voltas' answer.
The move is part of the restructuring plan to focus on the core businesses of air-conditioning and engineering, and getting out of all other non-core businesses.
The offloading in SMS India is Mumbai, July 28: Voltas, as part of an ongoing restructuring, has exited from its joint venture with German multinational SMS Schloemann Siemag AG. The diversified Tata group major has divested its entire 49 per cent stake in SMS India in favour of the German partner.
Voltas will receive Rs 4.8 crore in lieu of the stake against a total investment of Rs 3.67 crore in the venture.
The joint venture company was promoted in March 1994 to manufacture, design and install machines for steel-rolling mills. Voltas has said that the venture did not fare well, ever since its incorporation, owing to long gestation period of contracts, and unremunerative prices for large projects."After carefully examining the position, the board has decided to opt out of the joint venture as a co-promoter of SMS India," is Voltas' answer.
The move is part of the restructuring plan to focus on the core businesses of air-conditioning and engineering, and getting out of all other non-core businesses.
The offloading in SMS India isthe third divestment undertaken by Voltas in the last 12 months. In September last year, it had hived-off its thermostat division to British multinational Seibe Plc for Rs 5.43 crore. It has also leased out its factory premises to Seibe India, the wholly-owned subsidiary of the British major, for Rs 1 crore.
Earlier this calendar, the Tatas had decided to move out of pharmaceuticals. Consequently, its sold its stake, held through Tata Sons and Voltas, in Merind at Rs 260 per share to Wockhardt.
This resulted in a Rs 11 crore windfall for Voltas. It is also learnt that the gain arising out the sale of Merind shares will be used to provide for the erosion in value of Voltas' investments in some of its subsidiary companies.
Voltas has also integrated the operations of its electrical machinery division with Voltas Switchgear, a subsidiary believed to have been placed on the block. The division used to market Voltas Switchgear products, and the integration will enable consolidation of marketing andmanufacturing activities.
It recently hived off its white-goods division in a joint venture with Electrolux AB. Another non-core business, chemicals, is also up for sale.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
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