Mumbai, March 22: The board of directors of Videocon Industries has decided to merge EKL Appliances Limited, formerly Electrolux Kelvinator Limited, with itself.

The company has informed the stock exchanges that according to the valuation report, the exchange ratio has been fixed at 1:27,619, which means shareholders of EKL Appliances holding 27,619 equity shares will get one share of Videocon Industries.

The appointed date for the merger has been fixed as January 1, 2005.

In July last year, Videocon group had acquired the 91.85 per cent shareholding of AB Electrolux in its loss-making Indian subsidiary, Electrolux Kelvinator Limited.

In addition to gaining control of EKL’s three facilities in India, Videocon, under a separate licence agreement with AB Electrolux, had earned the rights to distribute products under the Electrolux, Kelvinator and Allwyn brands in India and other Saarc countries.

EKL broke even in January this year with revenue for the month exceeding Rs 35 crore and net profit at Rs 4.2 crore. The company has set itself a revenue target of Rs 700 crore, with a net profit of Rs 85 crore for the calendar year 2006.

The company had posted sales of Rs 400 crore last year with net loss for the July-December period at Rs 15 crore.

Videocon Industries had recently announced that the company would submit a bid to acquire South Korean appliances maker Daewoo Electronics.

The shares of Daewoo Electronics, an unlisted company, is 97 per cent owned by creditors, including Korea’s state-run Korea Asset Management Corporation and Woori Bank, a unit of Woori Financial Group.

According to media reports, the company is also willing to buy out its Japanese partner Matsushita Electric Industrial Co’s 70 per cent stake in an Indian joint venture that makes washing machines.

The company recently kickstarted operations at its new electronics goods manufacturing unit at the former Kanchan food products complex in Siliguri, West Bengal. The group would invest over Rs 100 crore in the unit in phases to supply to the Northeast as well as Bangladesh, Nepal, Bhutan and Myanmar.