Carborundum Universal to exit Palakkad unit

Our Corporate Bureau

Chennai, Oct 31: Chennai-based Carborundum Universal Ltd (CUMI), part of the Rs 3,900-crore Murugappa group has decided to divest its stake in the Electrocast Refractory Unit at Palakkad. The board of directors of the company on Wednesday approved the sale of the Palakkad unit to SEPR Refractories India Private Ltd, which is part of the Saint Gobain group.

The agreement for sale is likely to be signed soon, according to a company statement. It may be recalled that in October 1999, a proposal to covert the refractory unit into a joint venture company was approved by the board and the shareholders. "The decision was not implemented and the company had to exit from the business as it was unable to find a global player," the statement said.

CUMI, to accelerate its profitability, has also decided to venture into new businesses including information technology. As a first step towards this initiative, the company is acquiring controlling interest in two companies engaged in IT-enabled services. The company is planning to acquire 100 per cent stake in Net Access India Private Ltd. CUMI would be investing Rs 1.6 crore in the capital of Net Access, a company involved in providing Internet-based business solutions.

The company has also decided to acquire 68 per cent interest in Chennai-based Webword Holdings & Management Private Ltd. CUMI would be investing about Rs 18 crore for acquiring stake in Webword after obtaining requisite approvals, the statement said.

Meanwhile, CUMI has reported a 5.9 per cent decline in its net profit during the quarter ended September 30, 2001.