The Union government is, however, yet to approve transfer of ownership of Philips Telecom to Simoco International India, as the company would now be called.
Simoco would initially pick up 51 per cent and later look at the possibility of raising its stake further, a top Philips source told Business Standard.
Till then, the two companies will work jointly in managing the affairs of Philips Telecom.
The telecom arm in India has not been doing well primarily because of an unsuccessful foray into pagers which has pushed the company into the red. The company also manufactures mobile radios.
Philips Telecom recorded a loss of Rs 4 crore over a turnover of Rs 30 crore during the last financial year. The company is, however, hopeful of an improvement in its bottomline over the next couple of years.
The only way to do that would be by going hi-tech once the company changes hands, said the source.
More From This Section
Simoco International India, managed by Anton Abraham, former chief executive of Modi-Telstra, is currently looking at the possibility of introducing more advanced telecom equipment.
Philips India, it is believed, is unwilling to invest any further in its telecom operations. To rationalise its operations, the company has offered a voluntary retirement scheme to its employees.
Though the unions interpret this as a ploy to reduce workforce to half before the company officially changes hands, the Philips source said the unions are obviously jumping the gun.
While the management feels that reducing redundant positions is essential for going hi-tech, they do not rule out the possibility of employing more skillful workers with expansion of operations.
Meanwhile, A B Dasgupta, the acting managing director of Simoco International, who was on deputation to CINVen for the duration of the actual transfer of Philips' telecom business, is rejoining Philips from October 1.
Philips Telecom was initially set up as a 40:60 joint venture between Philips India and West Bengal Electronics Industries Development Corporation (Webel).
In 1995, the Dutch multinational had taken up another 11 per cent. Later, it quietly acquired the remaining 49 per cent of Webel's stake.
The transfer was reportedly done at Rs 84 per share.