The Hindu Business Line : TVS Electronics to sell Tumkur unit to Finland co

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Chennai Feb. 26 TVS Electronics on Monday said that the company's board of directors has approved the sale of its Contract Manufacturing Services (CMS) Business at Tumkur to Incap Corporation, Finland, and issuance of preferential warrants to its promoter, TVS Investments.

Mr Gopal Srinivasan, Director, TVS-Electronics, told Business Line, "We wish to prepare for growth and to release more funds for the same. We will be raising between Rs 50 crore and 60 crore together from the issue of warrants and the sale of the Tumkur facility."

He said that TVS Electronics planned to focus on two businesses — transaction products and customer support.

Mr Srinivasan said, "The transaction products business has been doing well. This quarter has also been good for us. We wish to focus on our products and bring out newer models." He added that in addition to its thermal printer product line, the company would begin the manufacture of point-of-sale printers and passbook printers this year.

The company would also be spinning off its customer support business into a wholly owned subsidiary.

The company would be increasing its authorised share capital from Rs 20 crore to Rs 25 crore, in addition to issuing 36 lakh warrants on a preferential basis to its promoter, TVS Investments Ltd at one equity share for every one warrant.

Commenting on the sale of its contract manufacturing plant in Tumkur, Mr Srinivasan said, "We were not growing fast enough. The search for a buyer lasted a year. Eighty per cent of the unit's business comes from Europe, so a Finland- based buyer made sense for the company. The buyer has also committed to expanding operations by 50 per cent in the coming year. So, both the clients and the employees of the Tumkur unit would be happy."

It is believed that the sale of the Tumkur unit would fetch the company between Rs 30 crore and Rs 40 crore, while the warrants would fetch about Rs 20 crore.

The company has also decided to establish a manufacturing unit in Uttaranchal, in addition to its base in Himachal Pradesh.

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