The Hindu Business Line : Rakesh Jhunjhunwala to get 10% in Autoline Ind

Kolkata, May 8 The Pune-based Autoline Industries is enhancing its capital base through preferential issue of equities and warrants. Mr M. Radhakrishnan, Joint Managing Director of Autoline, informed Business Line that Mr Rakesh Jhunjhunwala and his associates are being issued 12.5-lakh shares, representing a little less than 10 per cent of the full post-warrant conversion enhanced capital of Rs 12.95 crore.

Mr Radhakrishnan said the Indian and foreign promoter groups were being issued 5.4-lakh equity warrants each. “Duke Equity, a US-based private equity player, would roughly hold 30 per cent plus in the increased paid-up capital, after the warrants were converted, almost the same level as that of the Indian promoters.”

Fresh issues

The warrants are priced at Rs 250 per share (including premium of Rs 240 each), while the shares are priced at Rs 235 (premium Rs 225). Mr Jhunjhunwala group’s holding, after all the fresh issues were through, would move up to nearly 12 per cent of the enhanced paid-up capital.

An EGM has been scheduled on June 3. The company also would publish audited results next month. The company has decided to shift registered office from Bhosari to Chakan within Pune. Meanwhile, after about a year’s delay, Autoline JV — Union Autoline Spareparts LLP — in Abu Dhabi in the UAE is going on stream in July. Though Autoline has 49 per cent stake in the company, management control lies with it, while the local promoter has the balance.

During the last fiscal, Autoline acquired the manufacturing operations, business and associated assets (without any liabilities) of the jack and tool kit of Dura Automotive Systems, USA. Dura’s jack and tool kit business has one US plant located in Butler, Indiana, where it employed approximately 140 people. With annual revenues of approximately $25 million, Dura’s jack and tool kit business produces automotive bottle jacks, scissor jacks and related products for automotive jack tool kits.

The jack and tool kit business’ capabilities also include metal stamping, powder coat paint and assembly.

Manufacturing facility

With this acquisition, the company has acquired a 1,40,000 sq ft (on 17.64 acres of land) manufacturing facility near Fort Wayne, Indiana, (the birthplace of automotive body-works in the US) with nine modern transfer presses ranging from 200 tonnes to 1,000 tonnes each, painting and assembly lines, as well as eight US patents, and over 30 proprietary designs for Jacks and tool-kit products at a total cost of $9 lakh.

According to auto sector analysts, the company is currently considered second-largest manufacturer of jacks. It is likely to report revenue of Rs 390 crore and a PAT between Rs 30 and Rs 35 crore for 2007-08, in line with management’s earlier projection. Mr Radhakrishnan said for 2008-09, the company might project a 100 per cent growth in topline and more than 100 per cent bottomline growth in view of new businesses in the US and in West Asia.

The stock closed at Rs 270 on Thursday, representing over 30 per cent price appreciation during the last one week. However, analysts felt the forward earning growth has not been fully priced in yet.

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