Videocon group sells 30% stake in Matsushita joint venture

Nisha Das
20 January 2003

Mumbai: The Dhoots of the Videocon group have sold their 30-per cent shareholding in Matsushita Air-conditioning India Ltd, its air-conditioner manufacturing joint venture (JV) with Matsushita of Japan, for an undisclosed amount. The ACs are sold under the national brand name.

Confirming the development, Videocon International president Pradeep Dhoot says Matsushita, which has a 70-per cent shareholding in the Chennai-based JV, had approached the Foreign Investment Promotion Board to increase its stake to 100 per cent by acquiring the shares held by Videocon. “We were negotiating for a better price and have now sold our entire stake in the venture.” Dhoot, however, was reluctant to reveal the selling price.

Earlier the Dhoots were demanding a price between Rs 80 crore and Rs 90 crore for the deal, based on a book value of Rs 30 per share. The existing paid-up capital in the JV is around Rs 40 crore, of which the Dhoots’ investment is around Rs 13 crore.

The five-year-old JV currently has an annual sales turnover of Rs 120 crore. It manufactures ACs, both split and window, as well as rotary and reciprocating compressors at the Chennai plant. The greenfield plant is considered to be Matsushita’s best manufacturing unit in the South and Southeast Asian region.

Industry sources say Matsushita wants to consolidate the company’s Indian operations, which have been reeling under losses since some years. Matsushita’s television manufacturing JV with Salora, which makes and markets the Panasonic brand, has not met with the desired success and the company has charted a new plan for a complete turnaround.

The Japanese consumer electronics major has, in the recent past, bought out its Indian partners from National Panasonic India to convert it into a wholly owned subsidiary. Matsushita also has JVs for manufacturing refrigerators, kitchen appliances and dry cell batteries in India.