Carborundum Universal acquires Volzhsky of Russia for $37 million
By Our Corporate Bureau | 08 Sep 2007
Chennai: The Rs526 crore abrasives major Carborundum Universal Limited (CUMI), has acquired 84 per cent equity stake in Volzhsky Abrasive Works of Russia for $37 million.
The Indian company made the acquisition through its wholly owned subsidiary CUMI International Limited, Cyprus.
CUMI has plans to increase its holdings to 100 per cent soon. Volzhsky Abrasive Works holds 12.67 per cent of its ordinary shares as treasury investment, which represents approximately 10 per cent of the Russian company's charter capital.
Cancelling Volzhsky Abrasive Works treasury shares will result in Carborundum Universal's holding going up to 96 per cent of the ordinary shares. An open offer for the balance 4 per cent ordinary shares is being made as per statutory requirements.
The $54 million Russian company is the largest producer of silicon carbide abrasives there with 65,000 tonne per annum (tpa) capacity. However, it produced only 11,500 tonne last year, nearly one third of its actual capacity.
Volzhsky Abrasives also manufactures bonded abrasives (capacity 35,000 tpa) and specialised refractories (1500 tpa).