Degussa, Vam Organics Parleys For Inilco Stake Break Down
Negotiations between Ger-man chemical major Degussa and Vam Organics for buying out the laters stake in Inilco have broken down.
According to an official press release of Degussa's, discussions with their joint venture partner Vam Organics regarding the takeover of their 34 per cent stake in Insilco have been suspended without resolution.
Both joint venture partners hold 34 per cent each, 29 per cent is held by the public and the balance five per cent is held by banks.
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Insilco is primarily a manufacturer of silica, which finds application in the tyre, rice roller, footwear, rubber, toothpaste and poultry feed industries.
The company incorporated four years ago has slipped into the red.
Accumulated losses stood at Rs 43.73 crore in 1996-97 as compared to Rs 52.76 crore in 1995-96.
The company's 1996-97 bottomline suffered due to over capacity in the global Silica industry which led to a fall in prices.
Consequently, there was also a fall in Insilco's export realisations. The failure of the talks between the two sides comes amidst the backdrop of Degussa going on an expansion spree worldwide.
Last year the company almost doubled its capacities at its American plant in Chester, Pennsylvania.
It also has expansion plans at the United Silica Industrials (USIL) factory at Ta Yuan in Taiwan and the Wesseling plant near Cologne in Germany.
In Spain Degussa has taken over the precipitated silica and zeolite manufacturer Silquimica SA by acquiring the remaining 50 per cent stake from their joint venture partner General Quimica.