Hitachi Home Buys Out Lalbhai Group Stake In Amtrex For Rs 12 Crore

Mumbai, January 21: | Updated: Jan 22 2003, 05:30am hrs
Hitachi Home & Life Solutions Inc. (HHLS) has acquired the entire 19.4 per cent stake of the Lalbhai Group in Amtrex Hitachi for a consideration of Rs 11.8 crore.

With this, while the Lalbhai Group has exited the non-core business of air-conditioners, HHLS stake increases from 35.2 per cent to 54.6 per cent, making it the majority stakeholder in Amtrex Hitachi. The balance 45.4 per cent shares will remain with public and financial institutions.

HHLS is the $3.82 billion home appliance company and a fully-owned subsidiary of Japanese major Hitachi Ltd. The Lalbhai Groups stake in the Rs 254.8 crore air conditioner company has been acquired at a price of Rs 41.64, which is almost double the prevailing share price of the company at the Stock Exchange, Mumbai (BSE). The share price of Amtrex Hitachi closed at 21.75 at the BSE on Tuesday, up Re 1 over its previous close.

This being an inter-se transfer of shares among co-promoters and foreign collaborators, the provisions relating to open offer under the Takeover Code do not apply.

Subsequent to the transaction, the Lalbhai nominees on the Amtrex Hitachi board Sanjay Lalbhai, chairman, and Naisadh Parikh, managing director resigned, and Hitachi has inducted Mr Shinya Yoshinaga as the new chairman and Mr Shoji Tsubokuta as the new managing director. A Hitachi press release stated that the board will be expanded and further strengthened in due course.

Commenting after taking over as chairman, Mr Yoshinaga said: Hitachi places India as a significant and high potential market for air conditioners, and has therefore made a decision to expand this business in India.

Meanwhile, to augment the financial resources of the company for its ongoing business needs, Amtrex Hitachis board approved issue of rights shares in the ratio of 3:5 (three shares for every five held) at a price of Rs 31 per equity shares of Rs 10 paid up value (premium of Rs 21 per share). Subject to approval by the shareholders, the company proposes to issue 8.8 million shares aggregating to Rs 272.84 million to the existing shareholders. The proposed rights issue will increase the companys equity from the current Rs 14.66 crore to Rs 23.47 crore.

Amtrex Hitachi is engaged in the manufacturing and sale of the full range of air conditioners in India. Hitachi has provided technological support for air conditioners since 1990 through a series of collaborative arrangements.

After its equity participation in 1999, it had reinforced Amtrex Hitachi with technical and brand support including deputing Japanese expatriates in design, manufacturing and quality assurance.