| Thapar: Mum’s the word
Calcutta, June 25: ITC is close to acquiring the duplex board manufacturing plant of BILT Industrial Packaging Company (Bipco) in Coimbatore, Tamil Nadu, for close to Rs 150 crore.
ITC, which has around Rs 3,000 crore in cash in its coffers, says in its latest annual report that it is “actively engaged in examining expansion opportunities (in the paperboard business), both greenfield and inorganic”.
Bipco’s plant in Coimbatore can produce 65,000 tonnes of duplex-based boards in a year. The material is mostly used in packing fast moving consumer goods (FMCG).
The L.M. Thapar group — the promoters of Ballarpur Industries (Bilt) — acquired Bipco in 1999. Industry observers say, despite high capacity utilisation of the plant, the L.M. Thapar group has not been able to turn Bipco around.
Gautam Thapar, Bilt’s managing director, refused to comment on the deal. The spokesperson for ITC was not available for a response.
Though no confirmation could be obtained from ITC and Bilt, sources in Virginia House who are familiar with the development say the two companies have reached an agreement on the deal and the contours of the financial arrangement are being discussed.
“ITC will not be acquiring the company because of its huge liabilities. ITC is most likely to take over the plant through a structured deal of around Rs 150 crore,” they say. “Structured deal” implies ITC would be paying the consideration in several tranches, they explain.
ITC earned Rs 1,163 crore in revenues from its paperboard, speciality paper and packaging material business in the financial year that ended in March 2003. Its operating profit from the segment was Rs 226 crore, 40 per cent higher than the previous year.
ITC’s investment and finance arm Russell Credit Ltd has increased its holding in VST Industries — an associate of BAT Plc — by 0.49 per cent. Russell Credit, which posted a net profit of Rs 12.57 crore in 2002-03, now holds 10.5 per cent in VST.