The Central Government has approved the valuation of the shares of Phoenix Yule Ltd (PYL), a joint venture of Phoenix AG Germany and the public sector Andrew Yule Company Ltd (AYCL) and also the offloading of the 26 per cent equity held by AYCL in PYL.
The 119.43 lakh shares valued at Rs. 49.50 per share would be sold to Conti Tech AG, a subsidiary of Continental AG, which now holds 74 per cent of the equity. PYL, which is the largest conveyor belt manufacturing company in India, would thus become a wholly-owned subsidiary of the German company.
AYCL Chairman and Managing Director Kallol Datta told The Hindu that as per the joint venture agreement entered into in 1998 and consequent to the transfer in 1999, each company had the first right of refusal regarding stake sale.
He said that AYCL and PYL had jointly appointed PriceWaterhouse to determine the share price. The total consideration of Rs. 62.82 crore, including an additional compensation of Rs. 3.69 crore, would go towards repayment of a part of the interest-free loan of Rs. 87.06 crore given by the government to AYCL as part of its restructuring package.
A share purchase agreement will be signed between AYCL and Phoenix BV and PYL and the transfer of shares will take place immediately after the receipt of Rs. 62.82 crore by AYCL.
AYCL, which is controlled by the Union Ministry of Heavy Industries, is engaged in the manufacture of industrial fans, tea processing machinery, industrial pollution control equipment and allied products.
It also has tea gardens in Darjeeling. The belting division of AYCL was spun off as a joint venture company in 1998 with the German company holding majority equity.
PYL Managing Director T. K. Mukherjee said that the company was the only one in India to make 2.4 metre conveyors and also pipe-conveyor belts which carried materials in an environment-friendly manner.
As on the date of the transfer of the business in February 1999, AYCL had received Rs. 33.99 crore as purchase consideration of the 74 per cent of the firm value.
