ICI said this cash consideration for the assets is net of its equity investment of Rs 7.65 crore for the stake in the venture, Indian Explosives Ltd.

ICI India's vice-president for finance, V Krishnan, told The Financial Express that Orica has invested Rs 72.26 crore for its 49 per cent stake, paying a total premium of Rs 64.91 crore. "ICI did not have to pay any premium," Krishnan said.

ICI India's explosive manufacturing units at Gomia, Rourkela and Singrauli have now been effectively transferred to IEL, which now becomes the leading explosives manufacturer in India.

Orica Ltd's holding in IEL wil be through Orica Investments Pty Ltd, a fully-owned subsidiary. ICI India will have a majority representation on the company's board.

ICI India's 70 per cent holding in Initiating ExplosivesSystems India Ltd, which makes detonators, also passes on to the new joint venture.

ICI India executive director Rajiv Jain will concurrently be the chairman of the joint venture, while executive Sanjay Dayal is expected to take over as chief executive officer and director.

Krishnan said: "As we look at it, there is a Rs 87.26 crore inflow into the company and at the same time we get to retain 51 per cent stake in the company and effectively remain in control of the assets."

The release quoted Rajiv Jain as saying that the new company will inherit the industry leadership of ICI and "is poised to deliver outstanding value to its customers and shareholders through the participation in the venture by Orica, who is a global leader in the industry."

The release also quoted ICI managing director Aditya Narayan as saying that ICI will now concentrate on developing its other speciality products like decorative paints.

The chief executive of Orica's global explosives business, Peter Clinch, who is a directorof IEL, said: "Orica is proud to add India, an important market, to our global operations. We are excited about the opportunity to serve this market with our products and technology."

INSIGHT
More than expected

Against the anticipated price of Rs 65 crore, ICI India has recieved Rs 87.26 crore for sale of its explosive division and its stake in Indian Explosive Limited. WIth this the company will be focussing on higher realisation and growth segments like paints and speciality chemicals. ICI is expected to utilise the funds for acquisitions and marketing alliances in the paint business as well as those in speciality chemicals business.

-- Shishir Asthana