Herdellia Non_Core Units May Be Merged With Duncan

The Rs 2,800 crore G P Goenka group is understood to be weighing the option of merging the non-core business of Herdillia Chemicals with group flagship, Duncans Industries Ltd. The non-core business constitute investments, loans and advances.

The other option that might be taken up consideration is the merger of the non-core business with the other investment companies of the group -- Umagouri Investments Ltd, Golconda Investments, Ltd, Dail Investments Ltd, Leyden Leasing and Financial Services Ltd. The group had been toying with the idea of merging its investment companies for some time now.

G P Goenka said, "Nothing has been finalised as yet." It is understood that the group will be appointing consultants to work out the process of demerging the non-core business of Herdillia.

The group signed an agreement with Schenectady India Holdings on Tuesday to sell only the chemicals business of Herdillia. The $800 million Schenectady International Inc manufactures a wide range of products in electrical insulations and construction chemicals and has a presence in a dozen countries.

Schenectady India Holdings entered into an agreement with Duncans, representing itself and certain individuals, firms and companies on July 3, 2001, to acquire 5,521,723 fully paid up equity shares of Rs 10 each held by the seller in Herdillia Chemicals. The agreement represents 50.08 per cent of the outstanding paid-up equity capital of Herdillia, at Rs 20 a share payable in cash, to acquire the chemicals business of Herdillia.

Subsequent to the agreement with the G P Goenka group, Schenectady India Holdings along with Schenectady International Inc, as persons acting in concert, have made a public offer to all shareholders of Herdillia to acquire up to 22,05,000 shares representing 20 per cent of the outstanding equity share capital of Herdillia at a price of Rs 20 per share as required under the provisions of the Securities and Exchange Board of India's Regulations. The offer will open on August 20, 2001 and will close on September 18, 2001.

Herdillia Chemicals' scrip price increased 2.99 per cent to close at Rs 17.25 on the Bombay Stock Exchange.