Hitachi acquires majority stake in Amtrex Hitachi Appliances

21 January 2003

Mumbai: Hitachi Home & Life Solutions () (HHLS), the $3.82-billion home appliance company and a fully-owned subsidiary of Japanese major Hitachi, has acquired the share holding of its joint venture partner, the Lalbhai group, in Amtrex Hitachi Appliances, the Ahmedabad-based Rs 2,548 million (sales for fiscal 30 September 2002) air-conditioner company.

Hitachi has acquired the entire 19.4-per cent stake of the Lalbhai group in Amtrex Hitachi at a price of Rs 41.64, taking its shareholding from 35.2 per cent to 54.6 per cent, and becoming the majority shareholder.

The balance 45.4-per cent shares will remain with the public, financial institutions and banks. This being an inter-se transfer of shares among co-promoters and foreign collaborators, the provisions relating to the open offer under the takeover code do not apply.

Subsequent to the transaction, the Lalbhai group nominees (chairman Sanjay Lalbhai and managing director Naishadh Parikh) resigned from the board of directors of Amtrex Hitachi. At the same time, Hitachi inducted Shinya Yoshinaga as the new chairman and Shoji Tsubokuta as the new managing director. The board will be expanded and further strengthened in due course.

Commenting after taking over as the chairman, Yoshinaga says: “Hitachi places India as a significant and high-potential market for air-conditioners, and has therefore made a decision to expand this business in India. At this juncture, we would like to express our appreciation to the Lalbhai group for the cooperation extended by them until now, and also look forward to their continued support in future.“

To augment the financial resources of the company for its ongoing business needs, the Amtrex Hitachi board also approved issue of rights shares in the ratio of 3:5 (three shares for every five held) at a price of Rs 31 per equity share of Rs 10 paid-up value (premium of Rs 21 per share).