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Corporate - Mergers & Acquisitions


LG Electronics to buy IL&FS stake in LG Soft India

Ambarish Mukherjee

New Delhi , July 21

KOREAN electronics major LG Electronics is buying out a part of the stake in LG Soft India Private Ltd.

Currently, a 25 per cent stake in the joint venture software development company is held by IL&FS Trust Company Ltd.

Initially, LG plans to acquire a 14 per cent stake in LG Soft while the balance 11 per cent will remain with IL&FS. LG has an option to buy out this portion at a future date.

According to earlier reports, IL&FS' investment in the company was an indirect investment by the American Insurance Group (AIG). AIG set up an information technology sector fund that was managed by IL&FS, and the money transfer happened via IL&FS during 2000 and 2001, sources said.

According to sources, the transaction is being carried out at par. As of now, the joint venture outfit has a paid-up capital of Rs 11,20,42,700 of which around 75 per cent or Rs 8,40,32,000 is held by LG Electronics.

IL&FS Trust Company has 25 per cent holding in the company amounting to Rs 2,80,10,680. LG is to acquire 15,42,800 equity shares of the company of Rs 10 each at par, after which, its holding will go up to 89 per cent. The proposal was cleared by the Government recently.

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