The new company is likely to be set up before the transaction for sale of the American parent's stake in the Indian subsidiary to Luxottica is completed.

Bausch and Lomb India had announced last week that Luxottica would consider purchasing the American parent's stake in the Indian subsidiary subject to government clearance.

All manufacturing assets, inventories and receivables pertaining to the vision care business will be transferred to the new company, Bausch and Lomb India sources told The Financial Express. The vision care business comprise contact lenses, lenscare solutions and protein removal tablets.

As for the manufacturing facility at Bhiwadi, where the company produces sunglasses, contact lenses, spectacle frames and lenscaresolutions, sources said, under the current arrangement, it will remain with the existing legal entity, Bausch and Lomb India.

He added, that it was not clear yet if a part of the site and the facility where the vision care products are manufactured would be transferred to the new company once the transaction with Luxottica is finalised. "We are looking into the legal aspects of the such transfers," sources said.

Other details such as the capital structure of the new company, name and date of incorporation is yet to be finalised.

Bausch and Lomb plans to offer a broader portfolio of eyecare products and services in future. "The company would evolve into technology based eyecare company focussed on ensuring eye health and maximising visual performance with the world's broadest portfolio of eyecare products," company sources further said.

Bausch and Lomb had announced a decision in April to divest its loss making eye-wear or sunglasses business worldwide to Luxottica group, better known for brands suchas Giorgio Armani, Emporio Armani, Vogue and Anne Klien. Luxottica is considered a world leader in the design, manufacture, marketing and distribution of high quality eye glass frames in the mid-and premium priced categories.

The deal between the two company was finalised at $640 million was expected to close by June 30, 1999.