Asahi to consolidate India operations

By Our Special Correspondent

NEW DELHI, SEPT 21. Asahi Glass Company of Japan today said it was consolidating its presence in India to create the country's largest single glass entity. The company would transfer its entire 75 per cent equity in Floatglass India to Asahi Safety Glass. It also plans an open offer to buy the remaining stake from the public. The details about the offer will be announced shortly, said a company statement relayed here from Tokyo. Floatglass India is among the country's leading float glass maker, Asahi India is India's largest automotive safety glass manufacturer.

The move reflects a similar consolidation process that has been carried out elsewhere worldwide. ``This transaction was in keeping with the need to capitalise on the synergies available in the complete value chain in the glass industry in India," noted the Asahi Glass President, Mr. Shinya Ishizu. Asahi Glass has confidence in the management of its Indian arm and is sure of the future under the new structure. The transaction would make the two companies the largest player in the glass industry in the country, he added.

The consolidation will mean that the new entity will have a product line that will cater to all segments of the industry. Asahi India caters to the auto markets and Floatglass caters to the architectural market. The transaction, once completed, will give Asahi India a 75 per cent stake in Floatglass. Subsequently, Asahi India will also make an open offer for the balance 25 per cent equity which is held by the public. The details of the open offer are expected to be announced soon.

In addition to this consolidation, Asahi Glass is also initiating a plan for restructuring the foreign currency loan liability and cancellation of a major part of the preference share capital in Floatglass to improve its financial health. The restructuring exercise is expected to be completed by the end of this financial year. Besides improving the company's financial health, the move is also expected to result in synergies and vertical integration leading to cost savings, increased profitability and better quality.

Asahi India is a joint venture between Asahi Glass of Japan (24 per cent), Labroo family (24 per cent) and Maruti Udyog (12 per cent) and the balance is held by the public (40 per cent).

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Section  : Business
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