New Delhi, Nov. 7: ITC has entered into an agreement with BILT Industrial Packaging Company (Bipco) here today to purchase its paperboards business for Rs 233 crore.
The deal is inclusive of Bipco’s 65,000 metric tonnes per annum manufacturing facility at Thekkampatty in Coimbatore, Tamil Nadu. The amount will be payable over five years. The purchase will be subject to statutory, regulatory and other permissions as may be necessary.
Speaking to the The Telegraph, a spokesperson for Ballarpur Industries Ltd (Bilt), the flagship company of Lalit Mohan Thapar run by his nephew Gautam Thapar, said the company has already informed the Bombay Stock Exchange about the agreement. The spokesperson clarified that the deal is not with Bilt, but with Bipco, a Thapar group company.
Bipco, which makes paperboard, is owned by Bilt Paper Holding , the holding company of the Lalit Mohan Thapar group.
ITC is the country's largest producer of paperboard and speciality paper. Its paperboard business was under a separate company called ITC Bhadrachalam. It has now been merged with ITC. The paper division recorded sales of around Rs 875 crore (Rs 8.75 billion) in 2002-03.
Packaging industry sources said ITC has drawn up an aggressive growth strategy for its paperboard business. The Bipco buyout was the first step, sources added. Bipco, called Servall Engineering earlier, was taken over by the Lalit Mohan Thapar group three years ago.
Soon afterwards, Bilt took over Sinar Mas India, which gave it an additional capacity to manufacture industrial paper. This made the Coimbatore capacity redundant. At present, the plant is shut. After looking at various options like reconfiguring the plant and a total makeover, the group finally put Bipco on the block.
Since Gautam Thapar took over a few years back, the group has undertaken a series of acquisitions and divestments in paper. It has sold almost its entire stake in Thailand-based pulp producer Phoenix Paper and Pulp Public Company for Rs 140 crore (Rs 1.4 billion) and is now divesting its stake in Bipco.