Itc Weighs Buyouts In Packaging

ITC Ltd will focus on its packaging business while scouting for favourable acquisitions, even as the deal with the Ambarish Bhargava-controlled Rollatainers came a cropper.

An ITC spokesperson said the last communication which ITC had with Rollatainers was when they had sent a feedback relating to mismatch in value of assets calculated after the due diligence study by ITC with the figures in the company's balance sheet. "We have communicated the feedback about this mismatch to Rollatainers and have not received any response from them since then", the spokesperson said. It is believed that the ball is now in Rollatainers' court and it has two options if it is still keen on the deal _ It must either reduce the price or improve its asset quality.

 

It may be recalled that the Rollatainers EGM specially convened on September 28, 1999, to okay the preferential allotment of 51 per cent to ITC was called off owing to a hitch over the acquisition price (originally fixed at Rs 35 per share). Under the allotment proposal Rollatainers was to issue 70 lakh shares to ITC.

ITC, however, remains bullish about the packaging business in the country, especially in the near future when the second generation reforms of the economy are supposed to take off. ITC's printing and packaging division, said to be the largest converter of paperboard into quality printed packaging, is a major supplier to the cigarette and liquor industries.

"The demand for packaging products will increase mainly due to an increased market for fast moving consumer goods and heightened brand awareness all over the country," said the company spokesperson.