Financial Daily from THE HINDU group of publications
Friday, Mar 05, 2004
Financial Daily from THE HINDU group of publications Friday, Mar 05, 2004 |
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Corporate
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Mergers & Acquisitions Haier buys out entire stake in Indian unit
Richa Mishra
New Delhi , March 4 THE China-based $9.2-billion consumer durables and electronics major, Haier Group, has taken control of 100 per cent stake in Haier Appliances (India) Pvt Ltd by buying out the initial Indian promoters. With this, the Indian outfit becomes the wholly-owned subsidiary of the Chinese company. The company has recently been allowed by the Foreign Investment Promotion Board (FIPB) to transfer the shares held by Indian shareholders in favour of Haier Europe Holding B.V. and Haier Electrical Appliances Corporation Ltd. Mr Pranay Dhabhai had 90 per cent stake in Haier Appliances (India), while Mr Atul Sharma held the remaining 10 per cent. According to the scheme of arrangement okayed by the FIPB, the 90 per cent stake of Mr Dhabhai would be transferred to the Chinese parent company, Haier Electrical Appliances Corporation Ltd. The shareholding of Mr Sharma would go to the Haier Group's Netherland based subsidiary, Haier Europe Holding BV. At present, Haier Appliances has five directors of which four are overseas representatives and one Indian representative. With this, the entire stake of Indian representatives would be transferred to Haier Netherlands and Haier China, Mr Dhabhai told Business Line. The company's authorised capital stands at Rs 5 crore, which may be raised up to Rs 30 crore as per the FIPB approval. Haier Appliances (India) forayed into the Indian market when the Koreans, LG and Samsung, had swamped the country's consumer durables and electronics market. In fact, the FIPB nod to Haier to set up business in India came at a time when the Prime Minister, Mr A.B. Vajpayee, had visited China to strengthen economic cooperation between the two countries. The company had sought the Government's permission to carry out manufacturing — directly through original equipment manufacturers (OEMs) as well as through contract manufacturers in India. The company plans to make India as a production base for exports to neighbouring countries in the near future. At present, the company is outsourcing its products from domestic appliances manufacturers such as BPL and Voltas. "Once the sales reach critical mass we want to set up a manufacturing base in the country," said Mr T.K. Banerjee, President and Chief Executive Officer (CEO), Haier Appliances (India). Initially, the focus will be on building the brand and simultaneously putting in place a distribution network and customer care facilities, he said. The company till date has launched 17 models of refrigerators, 14 models of CTVs, 8 models each of washing machines and air-conditioners. It also launched four models of microwave ovens, two models of dishwashers and three models of DVD/VCD.
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