Exide Corp To Up Stake In Indian Arm To 89%
The US-based $3 billion Exide Corporation proposes to hike its stake in its Indian subsidiary Tudor India Ltd from the existing 51 per cent to 89 per cent by buying out its two main Indian partners. The remaining 11 per cent equity is the public holding in the company.
Exide Corporations stake in the Indian venture is through Tudor, Spain, which was bought over by Exide in 1994-95.
The multinational company is currently working out details of the estimated $10 million deal to buy over 14 per cent from the Dubai-based Kandhari group, and 24 per cent from the original promoters JM Shah of the MJ group of companies.
Exide, which recently launched its products through Tudor India under the Prestolite brand name in the Indian market, is eyeing a 40 per cent share in the country, with about one-fifth of its production targeted at the OEM segment comprising different automobile companies. It expects to do this through a multi-brand strategy which involves Exide, Tudor and Chloride -- brands that the US-based company owns internationally.
However, Exide was forced to launch its products under the Prestolite name, instead of the popular Exide brand, after a court order restrained it from using the Exide name in India pending the resolution of the case filed against it by the Raheja-controlled Exide Industries Ltd which has registered both the Exide and Tudor names in its favour in the country.
The additional inflow of funds into Tudor India after the proposed acquisition -- expected to take up the equity base of the company from the existing Rs 29 crore -- will be used primarily to pay off the debts of Tudor India and convert some of the loans extended by Exide Corp to the Indian company into equity.
After increasing the stake in Tudor India from the earlier-held 39.8 per cent to 51 per cent in May 1996, Exide Corp had shut their plant in Canada and sent all the plant and machinery to Tudor Indias facility near Ahmedabad.
The first phase plans over the next six months involve doubling of the plant capacity from the existing 450,000 per annum to one million units.
Thereafter, in the automotive batteries segment, the company plans to shortly produce batteries for two-wheelers. For this, Exide is in talks with Japanese battery major Yuasa, which has a collaboration with Tudors domestic competitor Amco, for sourcing two-wheeler batteries from the latter.
In the second phase of expansion, Tudor India plans to manufacture submarine battery, valve-regulated sealed lead-acid batteries, stationary batteries, and traction batteries.
In the automotive battery sector, the company is targeting a 20 per cent share in the OEM segment while the balance is earmarked for the after-market sales.