FloatGlass India to merge with Asahi India

The boards of leading automotive glass makers Asahi India Glass and FloatGlass India (FGI) on Thursday approved the amalgamation of FGI with its parent company Asahi India subject to requisite approvals.

Under the terms of the merger, Asahi India would issue three equity shares of Re. 1 each, fully paid-up and four 10 per cent cumulative redeemable preference shares of Rs 10 each, fully paid-up in itself to the shareholders of FGI for every eight equity shares of Rs 10 each, fully paid-up held by them in FGI.

This would be a 21 per cent premium over the closing price of an equity share of FGI on January 29, 2003.

The appointed date for the merger has been proposed to be April 1, 2002, a company statement said.

Asahi India currently holds 79.6 per cent in FGI, which it had acquired in 2001 following steps taken by Japan's Asahi Glass Company to restructure its Indian operations.

Consequent to the merger, the holding of Asahi India in FGI would stand cancelled. Thereafter, the paid-up capital of Asahi India in FGI would stand increased from the current Rs 7.4 crore to Rs 8 crore, a company statement said.

Preference shares amounting to Rs 8 crore would also be issued under the merger by Asahi India.

The preference shares would have a tenure of 12 months and carry a dividend of 10 per cent.

"This merger will help the Asahi India Group move forward towards achieving its vision of emerging as an end to end player in the glass value chain," Sanjay Labroo, managing director of Asahi India, said.

He said the merged entity would be the largest player in the domestic glass industry vertically integrated from manufacturing architectural float glass to automotive laminated and tempered glass.

Asahi India is jointly promoted by the Labroo family, Asahi Glass of Japan and carmaker Maruti Udyog.

Besides, benefitting from operational synergies between Asahi India and FGI, the merged entity would also be able to save on income tax arising from the accumulated unabsorbed losses of FGI.

Consulting firm Enam Financial Consultants is advising both the companies on the merger.

Asahi India has a capacity to produce 1.2 million car sets per day. It supplies automotive glass to various automakers including Maruti, Hyundai, Telco, Toyota and Mahindra and Mahindra.

The company also manufactures laminated architectural glass and toughened glass for white goods manufacturers.

FGI manufactures float glass of automotive grade as well as architectural grade and has an installed capacity of 500 metric tonnes per day.

Financial performance of FGI has improved in the current fiscal with the revamped management focusing on productivity enhancement and reduction in costs along with the restructuring exercise carried out Asahi Glass Japan at the time of transfer of its holding in FGI to Asahi India.

600450 FloatGlass India to merge with Asahi India glassonweb.com

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