SFL chairman and managing director Suresh Krishna briefing the press said that the company currently holds 14.33 per cent of Autolec's capital and proposes to acquire an additional 11 per cent by private negotiations.

The balance is to be acquired through a public offer for a total of 12.2 lakh shares at Rs 82.50 per share and a preferential offer of 10.31 lakh shares at Rs 60 a share.

Suresh Krishna described the acquisition of 51 per cent stake in Autolec as a `friendly takeover' and it will spend Rs 26-28 crore to get the shares. Autolec has a Rs 5.069-crore equity capital, which will go up to Rs 6.10 crore after the preferential offer.

SFL will have majority control, and the agreement is to allow Autolec chairman K Vasudevan to continue as chairman and hisson Balraj Vasudevan as managing director of the company even after it comes under the control of the TVS group. SFL and the TVS group will have four directors on the board and Autolec promoters three.

The formalities of the public and preferential offers are to be completed by August or September this year. When SFL takes majority control of Autolec, it will have between 51 and 58 per cent stake depending upon the response from the shareholders. The public offer price and preferential offer price are both as per Sebi guidelines.

The shareholding of K Vasudevan and family, which holds 34 per cent equity in Autolec, will decline to 29 per cent once the SFL acquisition is completed.

While Suresh Krishna said the takeover of Autolec Industries Ltd was synergestic with the activities of SFL and the entire TVS group companies, Vasudevan said after investing Rs 10 crore in the last two years for improving production processes and re-engineering, Autolec was looking for a launching pad for take-off and thedeal with SFL came at the right time.

The TVS group, with its 140 branches, was already marketing Autolec products in India, and the SFL acquisition will bring greater thrust to management practices of the company.

Suresh Krishna said that the TVS group's priority will be to study manufacturing processes and fine-tune them, while at the same time attempting to reduce costs substantially. The group will also explore new avenues for stepping up exports.

Autolec Industries saw a slide in growth of about 8 per cent in 1998-99 to Rs 74 crore, after posting about 9 per cent growth in sales to Rs 82 crore in 1997-98. According to Vasudevan, the decline during the last two years was because of recession in the automobile sector. Net profit too declined to Rs 1.03 crore, from Rs 3.32 crore in 1997-98.

But Vasudevan is confident that the company will show better results this year as the market sentiment has shown improvement and expects sales turnover to be around Rs 90 crore in the current fiscal.