Financial Daily from THE HINDU group of publications
Friday, Apr 11, 2003
Electrolux to pump Rs 20 cr in Indian arm
NEW DELHI, April 10
COMMITTED to resurrecting the financial health of its Indian joint venture Electrolux Kelvinator Ltd (EKL), Swedish white goods major AB Electrolux has expressed its intention to make a voluntary and discretionary revenue grant of Rs 20 crore.
"With this grant, AB Electrolux, the principal shareholder, in EKL has brought in Rs 70 crore since last year to improve the health of EKL," a company official told Business Line.
EKL had received a the letter dated April 3 from AB Electrolux expressing the parent's intention to make a voluntary and discretionary revenue grant of Rs 20 crore to the company.
Earlier, in 2002 EKL had received a one-time voluntary, discretionary revenue grant of Rs 50 crore from AB Electrolux, to meet part of its significant revenue expenditure and to improve its current liquidity position.
According to a company official, "AB Electrolux stands committed to its Indian operations.
In addition to these grants, the parent company has subscribed to the preferential capital issue of Rs 150 crore of EKL in December, 2002."
AB Electrolux holds 76 per cent stake in EKL, with the Indian promoter having a stake of 10 per cent and the balance with public.
For the year ended December 2002, EKL had recorded net sales of Rs 483.65 crore (Rs 473.56 crore in the previous year). The net loss for the year ended December 2002 stood at Rs 170.33 crore (against Rs 144.36 crore in the previous year).
"The accumulated losses as on December 2002 have resulted in erosion of a substantial portion of the company's net worth. With the continued financial support of the parent company and consolidation of business, the company hopes to better its performance this time round," an official said.
Further, the Government has recently given its nod to the proposal of AB Electrolux to hike its stake to 100 per cent in EKL by acquiring shares through open offer and subscribing to the unsubscribed portion of the rights issue.
On whether this would lead to the Swedish major opting for delisting from the Indian bourses, official said, "this would entirely depend on the response to the rights issue."
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