Tata Autocomp In Pact With Jbm Tools

Tata AutoComp Systems Ltd (Taco), the Tata auto ancillary venture, is entering into a strategic alliance with Delhi-based JBM Tools Ltd (JBMT), a manufacturer of sheet metal components for automobiles. As per the agreement reached, Taco and Tata Industries Ltd (TIL) will be picking up a stake in JBMT.

The proposed alliance would provide for a preferential allotment and an equity shareholding being taken in JBMT by Taco and TIL as permissible under the Sebi (Substantial Acquisition of shares and takeovers) regulations 1997.

JBMT is convening an extraordinary general meeting for seeking approval of shareholders to make a preferential issue and allotment of 57.60 lakh equity shares of Rs 10 each with a premium of Rs 32 per share to Taco and TIL, a release issued yesterday said. JBMTs equity currently is 3.20 as on March 9, 1996.

Under the proposed arrangement, Taco and its affiliates are proposing to invest about Rs 24 crore in JBMT and hold 50 per cent of the companys issued equity shareholding.

The joint venture will be targeting an annual sales turnover of Rs 700-800 crore in the next five years, the press release said .

Taco and its affiliates would support further investment in the company to enable it to achieve the proposed sales target. JMBTs current head, S K Arya, will continue to lead the company as the managing director under the new arrangement, the release added.

Taco is a new Tata venture for the groups proposed foray into the auto-component business.

Taco was set up by the Tatas as a holding company to promote a series of joint venture companies for manufacturing world class auto components.

These companies are expected to bring world class technologies to India and establish Indian capability in engineering and manufacturing in a wide range of products and systems, which will be required by the global auto-makers for their operations in India and abroad.

Taco plans to set up two types of joint venture companies. One set will be predominantly technology companies, which will be set up in joint venture with global auto-component manufacturers. The second group of companies will be floated to support the outsourcing activity in terms of quality productivity and reliability of supply. The second set of companies will be mostly joint ventures with Indian partners.

The first Taco joint venture, Tata Johnson Controls Automotive Ltd, is already operational and currently supplies seating systems for cars being manufactured by Mahindra Ford and Telco.