Floatglass India to merge with holding company

Friday, 31 January 2003, 08:00 Hrs   |    1 Comments
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Floatglass India Ltd (FGI) has decided to merge with its holding company Asahi India Glass Ltd. The merger, which was approved by the board of directors of the two companies Thursday, will take effect from April 1.

NEW DELHI: Asahi India Glass holds 79.6 percent equity in FGI, which it acquired in 2001 following initiatives by its Japan-based parent firm Asahi Glass Company (AGC) to restructure its Indian operations.

Under the proposed merger scheme, this holding of equity by Asahi India in FGI would stand cancelled. The paid up equity capital of Asahi India would increase from the current 74 million to 80 million.

The merger would also entail the issue of preference shares worth 80 million by Asahi India. The preference shares will have a 12-month tenure and would carry a dividend of 10 percent, a company statement said.

"This merger will help the Asahi India Group move forward towards achieving its vision of emerging as an end to end player in the glass value chain," said Sanjay Labroo, managing director of Asahi India Glass.

"The merged entity will be the largest player in the glass industry in India, vertically integrated from manufacturing architectural float glass to manufacturing automotive laminated and tempered glass," Labroo added.

The Labroo family jointly promoted Asahi India Glass along with Japan's Asahi Glass Company Ltd and automobile major Maruti Udyog Ltd to manufacture automotive glass in 1984.

The company currently has a production capacity of 1.2 million car sets per day. It also manufactures laminated architectural glass and toughened glass for white goods manufacturers.

The proposed merger takes forward the restructuring initiated in 2001 and brings Asahi Group's India operations under a single entity.

"This is expected to provide further benefits on account of synergies between the two entities. Besides this, the merged entity will be able to get savings on account of income tax arising from the accumulated unabsorbed losses of FGI," the company stated.

Enam Financial Consultants Pvt. Ltd. is advising the companies on the merger.

Asahi India Glass has also announced a 21.70 percent increase in sales and 89.71 percent rise in net profits to 24.18 million for the third quarter of the 2002-03 fiscal.
Source: IANS

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