Swiss firm Rieter sells its stake in LMW

Swiss firm Rieter Machine Works Ltd has exited Coimbatore-based textile machinery company Lakshmi Machine Works Ltd (LMW) by selling its 3.48 per cent share in the company for an aggregate Rs 78.40 crore.

Meanwhile, Reliance Mutual Fund has acquired 200,000 shares in LMW for Rs 2,005 per share, which aggregates to Rs 20.10 crore while HDFC Equity Fund and Prudence Fund together have acquired around 190,087 shares for Rs 38 crore, according to the NSE.

Rieter Machine Works Ltd has sold around 391,520 shares, which is its entire holding in LMW till last quarter, for Rs 2,002.59 per share. The company had around 13 per cent of LMW’s share earlier, of which around 9 per cent shares were brought back by LMW by 2010, according to a senior company official.

 

The buyback, in 2010, of around 1.1 million shares were of a total price of Rs 225 crore for LMW, said R Rajendran, director, finance, LMW. With the latest sales, Rieter Machine, which started the investment into the company by investing one million Swiss Franc in 1967, has made its exit from the company, he confirmed.

Apart from investment, the companies also had a collaboration to share technical know-how. LMW and Rieter also had a 50:50 partnership firm Rieter-LMW Machinery (RLM). LMW, earlier, acquired Rieters’ share in the joint venture, making it a wholly-owned subsidiary.

Rieter has already set up its manufacturing facility in Pune and with its manufacturing base in India, the company would be able to serve its customers independently.