Bidders List Lifts Balmer Lawrie

The shares of Balmer Lawrie moved higher by 3.40 per cent to close at Rs 93.50, after hitting an intra-day high of Rs 98.70 on reports that the Centre has shortlisted bidders for its selloff. The scrip saw combined volumes of about 73,000 shares on the BSE and NSE.

The price rise was further fueled by talks that the company's privatisation will be completed by January 2003.

Unconfirmed reports suggest that the government has finalised sell-off plans for the PSU. The government plans to hive off the company's four businesses into separate companies within five months. The four businesses include tours and travels, chemicals, container freight stations and tea blending & exports.

 

Earlier, there were reports that the government expects to garner around Rs 90 crore from the sale of the four businesses.

The government has already shortlisted prospective bidders. Earlier, the government appointed SBI Capital Markets to invite expressions of interest (EoI) for the strategic sale of 61.8 per cent in the company's equity, as well as to seek strategic alliances for its four business. Initially, the alliance will be in the form of a business association, which might be incorporated into a joint venture or a subsidiary, depending upon the success.

The government holds 59.6 per cent in Balmer Lawrie Investment, which in turn holds 61.8 per cent in Balmer Lawrie. This arrangement was put in place when IBP was disinvested.

The Kolkata-based Balmer Lawrie and Company manufactures industrial packaging, barrels and drums, LPG cylinders, greases and lubricants, leather chemicals, functional additives and marine freight containers.

It also undertakes tea exports and trading, travel, tours, and cargo and engineering services such as turnkey projects, energy-audit and consultancy and freight-container repairs. It is the largest manufacturer of steel barrels in India. It has a tie-up with Fuchs Petrolub, Switzerland, to market industrial and automotive lubricants.

The company has a joint venture with Indian Oil Corporation and NYCO, France, to produce aviation grade synthetic/semi synthetic lubricants and grease for defence services.

It has a tie-up with Cochin Refineries to manufacture polybutenes. The company plans to go in for a technical tie-up with foreign companies in high-performance industrial and automotive lubricant process oils and chemicals, and leather chemicals.

Balmer Lawrie plans to diversify into the manufacture of plastic containers and allied products, leather tanning and production of leather chemicals. It also has a major expansion plan to set up a second freight-container plant at the Madras Export Processing Zone with technical knowhow from Techtrans.

The company had earlier executed an export order for a specialty oil consignment. During 2001-02, the company had upgraded the tea factory at Kolkata to cater to the growing value-added business.

For the first quarter ended 30 June 2002, Balmer Lawrie registered a massive rise in net profit to Rs 3.52 crore (Rs 0.27 crore) on a 20.3 per cent growth in net sales to Rs 214.39 crore (Rs 178.22 crore).

As on 30 June 2002, public and institutions held 16.5 per cent and 17.2 per cent in Balmer Lawrie, respectively.