Grasim Industries plans to invest Rs 280 crore to acquire a 33 per cent stake in Domsjo Fabriker AB, a leading Swedish speciality pulp and bio-refinery company, from Aditya Holding AB.
Aditya Holding is equally owned by the group's international subsidiaries Thai Rayon Public Company (TRC) and PT Indo Bharat Rayon (Indonesia) (IBR).
Both TRC and IBR in April acquired Domsjo through a 100 per cent subsidiary Aditya Group AB for a consideration of Rs 1,500 crore.
The proposed acquisition will entail an investment of about Rs 280 crore for subscribing to the equity shares of Aditya Holding AB, the ultimate holding company of Domsjo. This will be funded by Grasim out of its internal accruals.
While Aditya Holding AB has invested SEK 1140 million in Aditya Group AB as equity, an interim funding of $165 million has been done by way of bank loans.
Grasim will invest in the equity of Aditya Holding AB at the same price at which IBR and TRC had invested. The proceeds will be used by Aditya Holding AB to repay the total loan of SEK 380 million (Rs 280 crore) contributed by IBR and TRC in an equal proportion, Grasim said in a press release.
With the acquisition of a stake in Domsjo, Grasim will be assured of supply of high quality dissolving grade pulp. This will enable it to increase its share in speciality fibre market. Domsjo is a profitable company and is expected to add to the consolidated profit of Grasim from day one.
Grasim Industries' shares on BSE were down 0.93 per cent at Rs 2,445 on Tuesday.