Textile machinery manufacturing major Lakshmi Machine Works (LMW) has acquired all of Rieter shares held in the Rieter-LMW Machinery Ltd (RLM), a joint venture company.
The machinery major informed the BSE on Friday that the value of the shares would be determined as on June 30, 2011, and once the process of disinvestment by Rieter is complete, RLM would become a wholly-owned subsidiary of LMW.
Production facility
A joint release issued by Rieter and LMW states that RLM would continue its production at the present site in Coimbatore for Rieter until June 30.
The closing of transactions is expected to take place in August and on completion of legal and procedural formalities, RLM would become a wholly-owned subsidiary of LMW.
Thereafter LMW would continue to utilise the facility for manufacture of textile spinning machinery.
Parting ways
It may be recalled that RLM, a 100 per cent export-oriented unit for Rieter ring frame assemblies was founded in 1994 as a 50:50 joint venture with LMW.
Due to the changes in the market conditions in India, the partners had agreed to concentrate on their own strength with Rieter setting up a manufacturing facility in Pune for manufacture and marketing of ring spinning frames for the Indian market.