Havells India jumps after subsidiary proposes to divest stake in unit

Havells India rose 4.71% to Rs 295.90 at 11:07 IST on BSE after the company said its wholly owned subsidiary, Havells Holdings Limited, Isle of Man, proposes to divest 80% stake in Havells Sylvania Malta BV.

The announcement was made during trading hours today, 10 December 2015.

Meanwhile, the BSE Sensex was up 32.98 points, or 0.13%, to 25,069.03.

On BSE, so far 4.12 lakh shares were traded in the counter, compared with an average volume of 4.75 lakh shares in the past two weeks.

The stock hit a high of Rs 297.20 and a low of Rs 280.50 so far during the day. The stock hit a 52-week high of Rs 346.15 on 10 December 2014. The stock hit a 52-week low of Rs 235.60 on 9 November 2015.

Havells India announced that its wholly owned subsidiary, Havells Holdings Limited, Isle of Man proposes to enter into definitive agreement with Shanghai Feilo Acoustics Co (Feilo) to divest 80% stake in Havells Sylvania Malta BV. Havells Holding Limited, Isle of Man will continue to hold the remaining 20% stake with exit options in next 3-5 years. Havells India also proposes to divest 80% stake in its wholly-owned subsidiary, Havells Exim Limited, Hong Kong. The combined equity value for 100% stake for both these companies is 186 million euros or about Rs 1340 crore as against Havells' cumulative investment value of Rs 980 crore.

Sale of shares with respect to 80% of the stake held in both the entities i.e. Havells Malta and Havells Exim shall be completed on or before end of February 2016. Remainder sale of stake of 20% in case of Havells Malta shall be disposed off during a period of 5 years, with a put call option enforceable at the behest of either party. Remainder sale of stake of 20% in case of Havells Exim shall be completed within 9 months from the closing which is likely to be on or before end of February 2016.

Havells Sylvania Malta BV (Sylvania) is a leading lighting products company with operations in excess of 48 countries. The brand has a legacy of more than 100 years and is perceived for its quality and workmanship. Sylvania has well-entrenched local operational teams, customer relationships and distribution network.

Shanghai Feilo Acoustics (Feilo) is the first listed company in China and is also the first domestic manufacturer in lighting industry which owns a national brand with over a hundred years of history. Fielo is also a State Owned Enterprise (SoE) in Shanghai.

Havells India's net profit rose 0.9% to Rs 120.72 crore on 1% decline in net sales to Rs 1339.01 crore in Q2 September 2015 over Q2 September 2014.

Havells India is a leading fast moving electrical goods (FMEG) company with a strong global footprint.

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