The Float Glass management was also recast with Asahi India with managing director Sanjay Labroo taking over charge simultaneously in the loss-making company from February 6, 2002.
Besides, Asahi’s full-time director PL Safaya also took over as executive director and chief operating officer of Float Glass. About the merger, Mr Labroo said: “It is a possibility. We do not rule it out. We can say something about the merger in the next six months.”
Japan’s Asahi Glass Co (AGC), which holds 24 per cent stake in Asahi India, had earlier transferred its entire 75 per cent shareholding and management control in Float Glass to its Indian JV after which an open offer was launched to acquire the remaining 25 per cent stake held by the public. “AGC had earlier transferred its entire equity in Float Glass to US free of cost. Float Glass’ total foreign currency loans of about Rs 225 crore have been also taken over by AGC and restructured as dollars denominated loan for 10 years, with no interest for the first eight years and LIBOR plus 0.75 per cent in the last two years,” Mr Labroo said.
“AGC has also written off Rs 143 crore along with the accumulated dividend of Rs 149 crore preference shares held in Float Glass to improve its financial health,” he added. Mr Labroo said the consolidation of Asahi India and Float Glass has created the largest glass entity in India with expected sales of Rs 500 crore during 2001-02 and gross profit of Rs 133 crore in the next fiscal. “The merger will help Asahi India to save taxes as Float Glass has a tax shield since it has been incurring losses. Also, operational synergies and vertical integration would result in cost savings and increased profitability,” he said.
Float Glass, which had accumulated losses of Rs 280 crore, was expected to turn around and post Rs one crore profit in the fiscal, Mr. Labroo said and added that Asahi Glass would increase its net profit to Rs 13 crore from Rs 8 crore achieved during 2000-01.