The Kolkata-based Electrosteel Castings, a ductile iron and cast iron pipes company, and the Hyderabad-based Lanco group today signed a strategic agreement which enables the former to pick up substantial stake and management control in the two companies of the latter.
The deal involves an investment/payment of over Rs 40 crore by Electrosteel Castings.
As per the agreement arrived at , which was also approved by the directors of respective boards at their meeting in Kolkata today, Electrosteel Castings will pick up a 51 per cent stake in Lanco Industries, a listed company, by subscribing to the equity shares of the latter through a preferential offer to be made at par.
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The deal will fetch the company, which recorded a loss of Rs 4.49 crore on a turnover of Rs 62 crore for the nine months ended December 2001, Rs 22 crore.
Lanco Industries is involved in the manufacturing of pig iron, the basic raw material for cast iron and ductile iron, and cement at its plants located near Tirupati.
Lanco will hold an extraordinary general meeting (EGM) on March 30 to seek shareholders