Financial Daily from THE HINDU group of publications
Wednesday, Dec 14, 2005
Financial Daily from THE HINDU group of publications Wednesday, Dec 14, 2005 |
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Corporate
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Mergers & Acquisitions Gujarat Setco buys Dana Corporation unit Our Bureau
Mr Harish Sheth (left), Managing Director, Gujarat Setco Clutch Ltd, with Mr Udit Sheth, ED, Setco Automotive (UK) Ltd, at a press conference in Mumbai on Tuesday. — Paul Noronha
Mumbai , Dec. 13 GUJARAT Setco Clutch Ltd on Tuesday reported acquiring Lipe Clutch Division of Dana Corporation, through its wholly-owned subsidiary, Setco Automotive (UK) Ltd. The acquisition cost was Rs 16 crore and was funded in part from the Rs 15-crore gained through New Vernon Private Equity Ltd's investment in Gujarat Setco. New Vernon had bought a 14.17 per cent stake through issue of new equity shares of face value Rs 10 each at a price of Rs 120 per share. IndAsia Fund Advisors Pvt Ltd were sole adviser to Setco on the transaction. "A part of these funds would be used towards widening the global spread of Setco,'' a related statement said. The UK-based Lipe, with which Gujarat Setco has had a technical collaboration since December 2000, expects revenues of Rs 25-26 crore in 2005 with around Rs 4.5 crore in profits. Gujarat Setco had a turnover of Rs 113 crore in 2004-2005 with a PBT of Rs 11.28 crore. According to Mr Harish Sheth, Managing Director, it is inevitable that Gujarat Setco looked abroad for growth because its domestic market share appeared saturated. The company is a Tier 1 supplier of clutches to all major Indian truck companies. It meets 90 per cent of Tata Motors' requirements for its HCVs and 80 per cent in MCVs, 100 per cent at Eicher and 30 per cent at Ashok Leyland (slated to go up to 50 per cent). "The next thrust will be from exports,'' Mr Sheth said at a press briefing.
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