Financial Daily from THE HINDU group of publications
Wednesday, May 18, 2005
Financial Daily from THE HINDU group of publications Wednesday, May 18, 2005 |
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Corporate
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Announcements Electrolux says no plans to shut facilities in India Our Bureau
New Delhi , May 17 EVEN as the Swedish home appliances major AB Electrolux has said that it has no plans to shut down its three production units in India, there is something brewing at its Indian subsidiary Electrolux Kelvinator Ltd (EKL). The air was rife with speculation that its loss-making Indian subsidiary could face either closure of production facilities or a leveraged buy-out. "AB Electrolux has no plan to close the three factories in India. Electrolux Kelvinator is undergoing restructuring and we are exploring several strategic options," Mr Anders Edholm, Vice-President (Communications), AB Electrolux, said. Mr Edholm, however, declined to divulge what the options could be. He also emphasised that there were no plans to substitute production in India with imports from manufacturing bases located in neighbouring countries. Meanwhile, analysts pointed out, that it is important to note that a leveraged buy-out by the management need not entail closing down of production facilities. The speculation on EKL's future comes at a time when its losses have come down substantially over the past year to a sub-Rs 100 crore level. "A company subject to restructuring is under constant review in terms of restructuring efforts, strategic options etc. EKL results have improved recently which is encouraging," Mr Edholm said. Meanwhile, the buzz in the market pointed to the possibility of a management buy-out by existing shareholders in the company with the front-runner being the Managing Director of Maharaja Appliances, Mr Harish Kumar, who has an upwards of 4 per cent stake in EKL.
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