Paid Rs 150 crore in an all-cash deal with Karl Steiner AG
Ajit Gulabchand-run HCC today acquired a controlling stake in Swiss real estate firm Karl Steiner AG in an all-cash deal for around Rs 150 crore (Swiss Francs 35 million), a move that will pave way for the company to enter the European and Gulf markets.
The acquisition, though subject to regulatory approvals, is also expected to help Hindustan Construction Company (HCC) enter the high-rise building construction segment. It expects to close the deal by the first quarter of next financial year.
"We agreed to acquire a 66 per cent stake in Karl Steiner AG (KSAG) to enter the high-rise building construction arena," HCC Chairman and MD Ajit Gulabchand told reporters here.
As a part of the deal, HCC would acquire the remaining 34 per cent stake in KSAG from its sole owner, Peter Steiner in 2014. Until that time, he would remain a minority shareholder and fully support HCC's management of KSAG as vice-chairman.
However, the shares would be sold at a pre-agreed price, based on KSAG's earnings achieved between 2010-2013, Gulabchand said.
Post-acquisition, KSAG would use the funds raised by capital increase for its Swiss operations, and the growth of the company's core business in India's growing residential and commercial construction market.
This strategic fit would also open the Swiss and European market to HCC's E&C business and will help procure greater access to technology and EPC (Engineering, Procurement and Construction) capability," the HCC Chief said.
With this buy-out, HCC also plans to capture the local market opportunity (Rs 60,000-70,000 crore market) and to have a presence in the Gulf, Gulabchand said.
High-rise building construction is one of the fastest-growing segments in India, and we look forward to addressing Indian customers' needs for top-class, green and well-integrated spaces for living, work and leisure, he added.
HCC is a leading engineering, construction and infrastructure development company specialising in large-scale infrastructure and new-age construction technologies.
Currently, the company has an order book of Rs 19,000 crore and a total debt of Rs 2,500 crore.
KSAG, a 95-year old business that specialises in turnkey development of new buildings and refurbishments, and all facets of real estate construction.
