The Hindu Business Line : ICI to hive off rubber chemicals biz to jt venture with US co

ICI India Ltd today said it will transfer its rubber chemicals business to a joint venture company with US-based PMC Group International to protect the long-term interest of the business.

PMC Group International and ICI will hold 51 per cent and 49 per cent stake, respectively, in the joint venture.

The company will receive about Rs 8 crore for the transfer of a 51 per cent stake in the rubber chemicals business to the joint venture, ICI said.

The proposed deal will involve transfer of the rubber chemicals business with all assets to the new venture. About 200 employees of the rubber chemicals business will also be transferred to the joint venture, a company statement said.

The shareholders' agreement envisages a `put option' for ICI India with corresponding call option for the PMC Group, it added. The value will depend upon the performance of the joint venture.

The rubber chemicals business was established in 1964 at Rishra in West Bengal and its production capacity was increased progressively. The business had sales of Rs 106 crore including exports of Rs 22 crore in the financial year 2004-05.

Speaking on the transaction, Mr M.R. Rajaram, CFO, ICI India, said, "The proposed transaction is in line with ICI India's strategy of securing unique strengths for each of its businesses to protect its long-term interest and to serve the best interest of all stakeholders associated with the business.

"While our association with PMC Group International will secure the required technology and market access to the rubber chemicals business, it will also help ICI India to aggressively grow both organically and inorganically the other businesses in its portfolio."

Post restructuring, ICI's rubber chemical business had returned to black and had been generating profits for the last three to four quarters.

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