Financial Daily from THE HINDU group of publications
Thursday, May 09, 2002
Mergers & Acquisitions
Parent to pick up balance stake in Carrier Air
MUMBAI, May 8
CARRIER Aircon Ltd may join the list of companies getting delisted, with its foreign parent officially set to make an offer to buy the company's entire floating stock.
Should this happen, listed air conditioning companies here would be reduced to three - Amtrex-Hitachi, Voltas and Blue Star. Of these, Voltas and Blue Star sport foreign technical collaboration but no foreign equity participation.
Carrier Aircon, which ended 2000-2001 with a profit-after-tax of Rs 6.26 crore on total income of Rs 461.77 crore had shown a loss (unaudited) of Rs 11.92 crore on total income of Rs 305.12 crore for the period ended December 31, 2001.
Industry sources here said, Carrier Aircon leads in the domestic institutional sales of room airconditioners with some presence in the industrial airconditioning segment dominated by Voltas and Blue Star. Globally, Carrier is a reputed manufacturer of industrial air conditioning equipment, they said.
Merchant banker DSP Merrill Lynch today informed BSE that Carrier International Mauritius Ltd along with Carrier Corporation and Carrier Singapore (Pte) Ltd, is making a voluntary offer to the public shareholders of Carrier Aircon Ltd to acquire up to 32,12,268 fully paid-up equity shares of Rs 10 each, representing 13.71 per cent of the company's paid-up equity share capital, at Rs 100 per share payable in cash.
The offer is not conditional on any minimum level of acceptance. The specified date is May 31, 2002. The offer opens on June 17 and closes on July 16.
Carrier Mauritius already holds 82,65,315 equity shares representing 35.29% of the paid-up equity share capital of Carrier Aircon (it acquired these shares pursuant to its open offer, vide public announcement dated May 16, 2001), while Carrier Corporation currently holds 1,19,46,056 equity shares representing 51% of the Indian arm's paid-up equity share capital.
Carrier Corporation is the promoter of Carrier Aircon and is in management control of the latter.
Against this total promoter's stake of 86.29 per cent, the 13.71 per cent targeted for acquisition by the voluntary offer represents the entire floating stock of Carrier Aircon.
Carrier Singapore does not hold shares in Carrier Aircon, but is the outfit that will make available to Carrier Mauritius the Rs 32.12 crore needed to complete the share mop-up.
The official statement to BSE on the voluntary offer said that should the public shareholding in Carrier Aircon fall to 10 per cent or below, then Carrier Mauritius will make a second offer to buy out the remaining outstanding equity shares held by the public within three months from closure of the offer, at the same offer price. The second offer would remain open for six months.
The payment to such shareholders will be made immediately upon acceptance of their shares by the acquirer. "Consequent to the public shareholding falling below 10 per cent, Carrier Mauritius and the persons acting in concert will request Carrier Aircon to approach the stock exchanges, where the shares are listed, for delisting the shares,'' the statement said.
The company's shares are listed on BSE and NSE, besides the bourses at Kolkata, Chennai, Delhi and Ahmedabad. At BSE today, the Carrier Aircon scrip gained from Tuesday's close of Rs 93.25 to close afresh at Rs 96.90.
The official statement attributed the offer to the need for greater commitment from Carrier Aircon's parent, in terms of finance, technology and products, given the competition in the Indian market pursuant to the entry of several major international brands.
The offer also comes at a significant juncture for the domestic airconditioning market, with contacted industry officials estimating a 15-20 per cent growth in the overall room air conditioning market (retail plus institutional) - including a 40 per cent potential growth in retail sales - this fiscal, against the roughly five per cent growth of last year.
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