Financial Daily from THE HINDU group of publications
Wednesday, Jun 05, 2002
Financial Daily from THE HINDU group of publications Wednesday, Jun 05, 2002 |
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Corporate
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Mergers & Acquisitions Matsushita to buy out Videocon in jt venture Our Bureau
CHENNAI, June 4 MATSUSHITA Air-Conditioning India Pvt Ltd is all set to become a wholly-owned subsidiary of Matsushita Electric Industrial Co Ltd, Japan, with the Foreign Investment Promotion Board approving a proposal from the Japanese company to hike its stake from 90 per cent to 100 per cent. The Japanese company will be buying out the balance 10 per cent held by Videocon through Dhoot Trading Agencies Ltd for a consideration of Rs 10.50 crore. Earlier, in March last, Matsushita Electric Industrial Co was allowed to increase its stake from 70 per cent to 90 per cent through a rights issue. Dhoot Trading Agencies decided to renounce its rights. The increase in foreign equity then resulted in an inflow of Rs 72.5 crore. Matsushita Air-Conditioning India Pvt Ltd was started in 1998-99 as a joint venture between Matsushita Electric Industrial Co and Videocon with an investment of Rs 60 crore. The Japanese company held 70 per cent of the Rs 35-crore paid-up capital, and Videocon the balance. The company has a plant at Irungattukottai, Sriperumbudur, near Chennai, where it manufactures the National brand of air-conditioners. The plant has an installed capacity of 75,000 units per annum in a single shift. It makes a range of one tonne, 1.5 tonne and split air-conditioners. According to reliable sources, Videocon decided to exit the joint venture completely after its stake came down to 10 per cent. Videocon, according to the sources, felt there was no point in holding on to this stake. Last year, Matsushita Air-Conditioning India Pvt Ltd sold 45,000 air-conditioners. For 2002-03, the company, according to the sources, has decided to change its strategy. Rather than push numbers, which entailed price cuts and discounts, the company has decided to wait for the customers to come and buy its product, based on product differentiation and the features the air-conditioners has. According to the sources, the company has introduced two models in May in the one tonne and 1.5 tonne segments. These come with what is called Catechin filters, which, according to the company, purifies the air to a greater extent. Also, the new models are stated to consume less power.
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