Havells India , the lighting and electrical products manufacturer, on Thursday said it has decided to sell 80 stake in Havells Sylvania Malta BV owned by its subsidiary Havells Holdings (HHL) and Havells Exim to Chinese company. It is subject to shareholders approvals.
“Havells Holdings, the wholly owned subsidiary of Havells India, has proposed to enter into definitive agreement with Shanghai Feilo Acoustics (Feilo) to divest 80 percent stake in Havells Sylvania Malta BV (excluding its subsidiaries based in United States, Brazil, Chile and Thailand),” the company said in its filing to the exchange.
Feilo, which has business of manufacturing and distributing lighting equipment, is the first listed company in China with key shareholding held by Inesa Limited, a state owned enterprise (SoE) of Shanghai Government.
HHL, Isle of Man will continue to partner and work alongwith Feilo to realise their shared vision of a stronger, bigger and global Sylvania, it said, adding HHL will continue to hold remaining 20 percent stake with exit options in next 3-5 years.
While addressing press conference after stake sale meeting, Anil Rai Gupta, Chairman and Managing Director of Havells India, said the company will continue to hold 20 percent stake in Sylvania.
“We have sold 80 percent stake in Sylvania for Rs 1,070 crore that will be used for expansion of company’s portfolio through organic & inorganic route,” he explained.
Havells has invested over Rs 980 crore in Sylvania in 8 years. Company’s balance sheet will strengthen post Sylvania divestment, Gupta said, adding standalone business continues to be on a strong footing and there is no change to standalone business guidance.
Havells India also proposed to divest 80 percent stake in its wholly owned subsidiary, Havells Exim based in Hongkong. It said combined equity value for 100 percent stake for both companies is euro 186 million (Rs 1,340 crore), subject to adjustments, if any, while its cumulative investment value for both stands at Rs 980 crore.
Total consideration of proposed transaction is euro 148.8 million, out of which euro 138.4 million for stake sale in Havells Sylvania Malta BV and the remaining for Havells Exim.
The transaction is expected to close by February 2016.
Zhuang Shenan, President of Shanghai Feilo Acoustics said Feilo would contribute to Sylvania through a wide portfolio of competitive LED products. We recognize the immense potential of
Sylvania teams in each of its local markets and are keen to support them with our product, technology and project capabilities.”
Havells Malta’s contribution to consolidated revenue of the company was 35 percent in FY15.
Additionally, Havells India and INESA have agreed for a strategic co-operation for a period of five years, to share resources, complement advantages and maximise value by utilising their resources in Indian and Chinese markets.
At 12:49 hours IST, the scrip of Havells India was quoting at Rs 306.45, up Rs 23.85, or 8.44 percent on the BSE.
Havells India stock price
On December 10, 2015, at 15:24 hrs Havells India was quoting at Rs 307.05, up Rs 24.45, or 8.65 percent. The 52-week high of the share was Rs 346.15 and the 52-week low was Rs 235.60.
The company’s trailing 12-month (TTM) EPS was at Rs 7.46 per share as per the quarter ended September 2015. The stock’s price-to-earnings (P/E) ratio was 41.16. The latest book value of the company is Rs 38.04 per share. At current value, the price-to-book value of the company is 8.07.