Reliance To Pick Up Rajus Stake In Dcl

Reliance Industries Ltd will buy the 25 per cent stake of M B Raju and his associates in DCL Polyesters, the polyester filament yarn (PFY) maker, through a subsidiary company, Synergy Synthetics Pvt Ltd.

However, the price at which the deal was struck has not yet been disclosed. Sources said the buyout price could be around Rs 6 per share.

The DCL scrip, which is not actively traded, is ruling at around Rs 4, down from Rs 11 on January 14, but up from Rs 2.75 on April 25. The purchase price for RIL should be under Rs 25 crore, the sources said.

 

Reliance will subsequently make a 20 per cent open offer to the minority shareholders of DCL Polyesters.

After the deal, Reliance's capacity is expected to increase by 40,000 tonne to 3,60,000 tonne, while its share in the PFY market will rise from 33 per cent to over 38 per cent.

RIL executives said the price at which the deal was struck will be announced shortly. As part of the deal, RIL will not only utilise DCL's polyester capacities but also supply basic raw materials _ purified teraphthalic acid and mono ethylene glycol.

The DCL plant, which is located near Nagpur in Maharashtra, has a PFY capacity of 40,000 tonne per annum. The technology for its manufacturing facilities has been licensed by EMS Inventa of Germany.

The company had posted sales of Rs 272.54 crore in fiscal 1998-99 and had recorded a loss of Rs 31.86 crore. Interest payout for the period was at Rs 28 crore. DCL Polyester has an equity base worth Rs 38 crore.