Ifb Chief Denies Distress Sale Of Arm

The IFB management has ruled out any distress sale of its home appliances division to German giant Bosch, its former technical and financial collaborator.

IFB managing director Bijon Nag said any alliance, merger or sale would be from a position of strength.

We are currently having friendly discussions with several MNCs, Nag said though declined to name any of them, while addressing a press conference in Calcutta yesterday.

IFB, however, has not ruled out a tie-up with Bosch or even a joint venture with the German company having a majority control. Denying reports that he is planning to sell his home appliances division, he said sales of IFB washing machines were the highest in December last and better results are expected in January this year. Besides, the company had recently incurred a capital expenditure of Rs 20 crore at its washing machines unit in Goa.

 

Nag, however, cited automotives as his main strength and the companys priority area. IFB has recently signed contracts with Benteler AG and Kuster & Co GmbH of Germany and Excel Inc of the US for the manufacture of automotive components, Nag said.

Highlighting the importance of brand equity, Nag said there is a need to concentrate on the companys core strength of precision engineering.

This would require substantial investments but declined to divulge any details about the size of the investment required.

He said the company has the options of diluting its stake, borrowing or of expanding its equity base for the purpose. He added that the last option is an expensive proposition so, for the moment, the company is taking the easy option of borrowing. However, the company is going in for a private placement of about Rs 40 crore, negotiations for which are on.

In the long run the emphasis has to be on organisational restructuring, Nag said. This would include creating of various focus groups in different product lines and identification of core business areas.

We have spread ourselves very thinly in some areas he said and did not rule out phasing out some business areas.

As part of its restructuring plans, the company is in the process of amalgamating RHW India, its wholly-owned subsidiary, within its fold.