Lg-Birla Combine Finalises Debt-Equity Ratio For Venture

and appliances joint venture at 1.5:1.

The two partners have applied to a consortium of domestic financial institutions led by the Industrial Development Bank of India (IDBI) to raise the Rs 300-crore debt component either as rupee loans or as foreign currency debt.

IDBI, which is appraising the project, has also received the mandate to assist the LG-Birla combine in deciding the extent of the foreign currency loan component, and will subsequently arrange for credit facility from the overseas capital markets for the project.

The two partners have also decided to constitute a three-member steering committee with representatives from both sides to sort out any contentious issue that could crop up during the implementation of the project. The committee is slated to have its first meeting in Singapore this weekend before a final agreement for the joint venture company can be signed.

 

The joint venture company was recently christened LG Birla Electronics Pvt Ltd.

Both the partners, each of whom has 50 per cent shareholding in the new company, are bringing in Rs 100 crore each.

LG Birla is planning to launch its CTV sets in January 1997 through import and local assembly, while it plans to launch imported refrigerators and washing machines by March 1997.

The company will market all the products under the LG brand name instead of the earlier proposed Goldstar name.