Indocean To Pick 40% Stake In Guj Glass

The George Soros-managed IndOcean Ventures Ltd will be picking up 40 per cent of Gujarat Glass, a division of the Ajay Piramal owned Nicholas Piramal India Ltd (NPIL).

NPIL is hiving off Gujarat Glass and its bulk and fine chemicals businesses into separate subsidiaries.

Industry sources told Business Standard, the Gujarat Glass stake will be picked up for Rs 120 crore. NPIL is also planning to sell off part of its stake in the bulk chemicals business, the sources added.

The proceeds from the divestment will be used for expanding the pharma business under Nicholas Piramal India Ltd (NPIL) and other core businesses.

 

Gujarat Glass is implementing a Rs 120 crore expansion at Jambusar and is setting up a 8mw power plant at its Kosamba facility in Surat for meeting power requirements. With export turnover currently at five per cent, it is making efforts to expand its presence in overseas markets.

The divestment is in line with Piramals strategy of getting out of non-core businesses to concentrate on the pharmaceuticals. Since Gujarat Glass is a captive supplier to NPIL, Piramal has decided to retain majority control in Gujarat Glass.

Gujarat Glass sells almost five per cent of its total glass production to NPIL. Its turnover for 1996-97 stood at Rs 104 crore, with 70 per cent coming from sales of glass and 30 per cent from vials.

Sources also said that the divestment was motivated by the need for funds. Ajay Piramal has been on an acquisition mode for expanding his pharmaceutical business.

After acquiring Roche, Boehringer Mannheim and a bulk drug company, Sumitra Pharma, he took the joint venture route towards consolidation.

A joint venture was signed with Reckitt&Colman and another one was planned with Boots Plc for the over-the -counter business.

Besides, NPIL also entered into a joint venture with Ambalal Sarabhai. Even in non-core activities, Piramal has joined hands for accessing technology from foreign partners.

Two divisions of Morarjee Gokuldas Spinning and Weaving Co Ltd were spun off to joint venture companies, with both partners having a 50:50 holding.