MP Birla group to buy entire shareholding of Ericsson Network Technologies in Birla Ericsson Optical

By: | Updated: July 13, 2016 11:44 AM

BEOL, incorporated in 1992 under the MP Birla Group of Industries, is a leading producer and designer of fibre optic cables in the country.

Ericsson Network Technologies (ENT), a subsidiary of Ericsson, is selling its 27.5 per cent shareholding in Birla Ericsson Optical to Universal Cables Limited and Vindhya Telelinks Limited. (Reuters)Ericsson Network Technologies (ENT), a subsidiary of Ericsson, is selling its 27.5 per cent shareholding in Birla Ericsson Optical to Universal Cables Limited and Vindhya Telelinks Limited. (Reuters)

Birla Corporation Ltd, the flagship company of the M P Birla Group, along with two group companies, Vindhya Telelinks and Universal Cables, is planning to acquire the entire shareholding of Swedish fibre optic cables maker Ericsson Network Technologies in the joint-venture company Birla Ericsson Optical Ltd.

The share acquisition move of the Kolkata-based M P Birla Group came after Ericsson Network Technologies expressed its intention to dissolve the joint venture agreement.

Birla Ericsson Optical (BEOL) is a joint-venture of Vindhya Telelinks (VTL), Universal Cables (UCL) and Ericsson Network Technologies (ENT). The Swedish company, which is the overseas promoter, holds 27.50% stake in BEOL, while VTL and UCL are the Indian promoters. The promoters presently holds 66.35% of the subscribed and fully paid-up equity share capital of Birla Ericsson Optical.

BEOL, incorporated in 1992 under the MP Birla Group of Industries, is a leading producer and designer of fibre optic cables in the country.

“Universal Cables Limited and Vindhya Telelinks Limited have intimated the company that they have executed a Share Purchase Agreement (SPA) with Ericsson Network Technologies for the acquisition of entire shareholding of ENT in the company i.e. 82,50,000 fully paid up equity shares of Rs 10 each (comprising 27.50% of total shareholding of the company) by the Indian ventures and/ or other promoters/ promoter group persons/ entities of BEOL as designated by the Indian venturers,” Birla Ericsson Optical said in a BSE filing on Tuesday.

“After such transfer, ENT shall cease to be a promoter/shareholder/technical collaborator of the company,” the filing added.

Significantly, Birla Corp’s chairman Harsh V. Lodha is also the chairman of BEOL.

In a separate filing to the stock exchanges, Birla Corporation said in the meeting held on Tuesday its board of directors approved the proposal for acquisition of a part of equity shares of BEOL in accordance with the terms and conditions of the Share Purchase Agreement. After the proposed acquisition, Birla Corp’s equity shareholding in BEOL as a part of the promoter group will increase from the current 3.13% to 17.96%. For Birla Corp, the cost of acquiring the additional equity shares in the company would be approximately Rs. 12.46 crore.

Birla Ericsson Optical Ltd’s gross revenue and net profit stood at Rs. 273.14 crore and Rs. 8.48 crore, respectively for the last fiscal.

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