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Wednesday, Dec 10, 2003

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HC okays NPIL move to delink from Guj Glass

K.R. Srivats
P.T. Jyothi Datta

New Delhi , Dec. 9

PHARMA major Nicholas Piramal India Ltd (NPIL) has moved a step closer towards de-linking itself from glass-container manufacturer Gujarat Glass Pvt Ltd (GGPL).

The move is expected to improve consolidated financials of NPIL, through debt reduction. The Mumbai High Court has approved the scheme of arrangement that provides for the transfer of NPIL's 54 per cent holding in GGPL to NPIL's shareholders through a new holding company, Nicholas Holding Company (NHC).

"The scheme was approved last week by the Court. We will now approach the stock exchanges," Mr Ajay Piramal, Chairman, NPIL, told Business Line here, when asked about the status of the scheme of arrangement.

NPIL had in June this year announced its intent to de-link itself from GGPL.

As a manufacturer of glass containers for pharmaceutical and cosmetic products, GGPL registered consolidated gross sales of Rs 306.49 crore and a profit after tax of Rs 5.01 crore during 2002-03.

The shares of NHC are to be listed in the stock exchanges in which NPIL's shares are currently listed. As per the scheme, NPIL shareholders will get one share in NHC for every four shares owned in NPIL.

The de-linking exercise is expected to help NPIL in focusing energies on the pharma business, with improved consolidated financials. It is also expected to substantially bring down the consolidated debt burden of NPIL, thereby unlocking value for the company, analysts said.

As promoter-shareholder of GGPL, Mr Piramal is quite bullish about the prospects for the glass-container manufacturer.

"GGPL is in a niche high value market. There is also increased export opportunities for glass containers used in cosmetics and perfumes. This year, we hope to achieve exports of about Rs 75 crore," Mr Piramal said. He also held that there would be no capacity expansion in GGPL for the present.

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