Public shareholders of The Indo-Asahi Glass Company should exit from the loss-making company. Bharat Glass Tube, a Khemka group company, is making an open offer to Indo-Asahi's shareholders to acquire a 20 per cent stake at a price of Rs 5.82 per share, against the market price of Rs 6.50. They have acquired a 39.76 per cent stake in Indo-Asahi from Asahi Glass Company of Japan at Rs 5 per share.
Indo-Asahi, which manufactures sheet, figured and wired glass, had posted a net loss of Rs 17.63 crore in 1997-98 and had accumulated losses of Rs 20 crore. The exit of the Japanese promoter has negative implications signifying that they have given up hopes of a revival. Asahi has a stake in another glass company Floatglass which is now on the verge of a turnaround. Despite funds infusion by Asahi, Indo-Asahi is making operating losses.
Indo-Asahi also had high debt of Rs 45.65 crore as of March 31, 1998 with a gearing of over two times. In the third quarter of 1998-99, Indo-Asahi posted a net loss of Rs 3.43 crore on sales of Rs 18.85 crore, with an interest burden of Rs 1.14 crore. The new promoters too do not inspire confidence.
The group's flagship company, Haryana Sheet Glass, is making losses since the last two years. Haryana Sheet has posted a net loss of Rs 8.20 crore on a turnover of Rs 82 crore for the nine months ended December 31, 1998. Moreover, the acquiring company Bharat Glass too has incurred a loss of Rs 4.86 crore on a turnover of Rs 19.74 crore, according to a news report.