Almost 15 months after acknowledging that India’s largest glass container maker is actively scouting for overseas acquisitions, success came on May 12, when the company announced that it has bought Agenda Glas AG of Germany for €50 million.
Agenda Glas’s 320 tonnes a day plant is located at Gardelegen, famous for its Garley beer, and it makes bottles for Jagermeister herbal liqueur and vodka Gorbachev. But the plant became unviable ever since it started operations in February 2010, and the company went into bankruptcy a year later. The “buyers from Kalkutta”, as the Somany brothers were described by the local media, then bought the facility through a short and quick insolvency proceeding.
The Somany bothers, Sanjay and Mukul, are known for turning around sick companies: in fact most of HNGI’s capacities have come via the inorganic way, acquiring and converting sick units of Owens Brockway in 2003, Larsen & Toubro in 2005 and Haryana Sheet Glass in 2007. Mukul Somany spoke to DNA about the industry, his company’s strategies and the way ahead. Excerpts from the interview:
You acquired Agenda Glas for €50 million. Is this the acquisition cost only or it also includes investment to revive the plant?
Given the fact that the plant was losing money and we needed to invest to set it right; euro 50 million is not only the cost of acquisition but also the capital expenditure that we have to make in six to nine months. The money that we had to pay as acquisition cost was about 75-80% of the €50 million, the balance will be invested in reviving the operations. We have acquired the fixed as well as the current assets.
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