The Hindu Business Line : Voltas buys shares in two joint ventures

Mumbai, Dec. 10 In order to exploit the opportunities in the electro mechanical and refrigeration products segment, Voltas Ltd has acquired 51 per cent shares from its joint venture partner – a local business man – in Saudi Ensas Company Ltd (SECL) for ‘nil’ consideration, according to Mr M.M. Miyajiwala, Executive Vice President – Finance.

“The business was doing good, but one contract faced substantial loss, due to which the net worth became negative,” said Mr Miyajiwala, explaining the reason for ‘nil’ consideration. With this financial restructuring, SECL would cease to be a joint venture company and become a fully owned subsidiary of Voltas Ltd, according to a company release on the BSE.

Universal Comfort

In another development, Fedders International Air-conditioning Pvt Ltd divested 50 per cent of its shares in Universal Comfort Products Ltd (UCPL) to Voltas at a sum of Rs 7.50 crore. With this, UCPL becomes a wholly owned subsidiary of Voltas.

“We formed the joint venture with the expectation of support in exporting our products, utilising the research & development facilities of Fedders in China and maximising capital utilisation, which did not happen. So, as we were already doing 90-95 per cent of our exports on our own, we decided to buy the remaining shares,” said Mr Miyajiwala.

The name UCPL will be retained for the moment, but the company may undertake certain changes in the long run, added Mr Miyajiwala.

On the BSE, the company’s scrip closed at Rs 244.15, up 3.23 per cent from the previous day’s close of Rs 236.50.