Exide buys out Lanka bank in arm

Exide Industries, the country's leading storage battery manufacturer, has picked up an additional 12.5 per cent stake in its Sri Lankan arm, Associated Battery Manufacturers Ceylon.

Following the deal, the Lankan company has become a subsidiary of Exide with a 61.50 per cent stake compared with 49 per cent earlier.

Exide has overseas arms in the UK, Singapore and Sri Lanka. The other two companies are Espex Batteries and Chloride Battery S E Asia Pte. Exide is also increasing the authorised capital from Rs 75 crore to Rs 100 crore.

Chairman and chief executive officer S B Ganguly said the Lankan arm was a three-way joint venture between Exide, Standard Finance Corporation of Sri Lanka and another Sri Lankan Bank. The Sri Lankan bank offered it's stake to Exide.

"The third partner was not willing to continue. So we bought their entire stake of 12.5 per cent. It has now become our subsidiary. But Standard Finance is still with the company," he said.

According to Exide officials, Standard Finance now holds the remaining 38.5 per cent in ABMC. Ganguly said Exide is focusing on consolidation of its business in India and abroad.

"This fiscal year we shall focus on consolidation and will do whatever is necessary for that," he added.

According to Exide chairman, the Indian storage battery market is likely to grow at 18 per cent during the year so Exide wants to capitalise that along with growth of the overseas business.

A company official informed that all the overseas arms of Exide were doing well. ABMC has registered Rs 65 crore (Sri Lankan Re) revenue in 2004-05 compared with Rs 57 crore in the previous fiscal.

The UK arm, Espex Batteries, has posted a turnover of 1.3 million pound in 2004-05 compared with less than one million pound in the previous fiscal.

"The subsidiary in Singapore has also done extremely well. This company is catering to South east Asia and Australian markets and is a strong player in traction battery segment for industrial applications," the official said.

On the increase in authorised capital by Rs 25 crore, the official said the current authorised capital is fully exhausted following the private placement to Aranda.

Incidentally, Exide had mobilised around Rs 57 crore through a private placement of 5.04 per cent stake to Aranda Investment, a subsidiary of Temasek, in December last year.