Glass bottles manufacturer Hindusthan National Glass (HNG) plans to make a strategic acquisition worth Rs 1,500 crore in the next 8-10 months as part of its overseas foray into the manufacturing segment, a top company official said.
HNG, India's largest maker of container glass, with a market share of around 65 per cent, is already in talks with two to three companies in Europe, the Middle East and North Africa for a possible buy-out.
"We are in talks with two to three companies for acquisition. We are looking at a deal-size of Rs 500-1,500 crore in the Middle-East, Europe or North Africa (which) would be finalised in the next 8-10-months. The overseas buy-out will help us expand our footprint in the manufacturing side," HNG Chief Financial Officer Laxmi Narayan Mandhana told PTI here.
He, however, refused to divulge the names of the companies HNG is eyeing for acquisition.
The funds for the acquisition would be arranged from various options, one being the company's 16.76 per cent treasury stock shares, which could be off-loaded in the market in several tranches, Mandhana said. With a debt-equity ratio of 0.5:1, the company also has the ability to raise substantial debt, he said.
HNG, which created its treasury stock in 2002 when it merged the Indian operations of Owens Brockway with itself, is in talks with an European MNC for the stock divestment, Mandhana said.
With three acquisitions in the domestic market -- Owens Brockway (2002), L&T's Nashik unit (2003) and Haryana Sheet Glass' Neemrana plant (2007), the company is now looking at expanding its business globally with a view to increase its market share in the glass container manufacturing business so that it can become the undisputed global leader.
Asked about HNG's domestic plans, Mandhana said the company plans to expand its manufacturing capacity to 4,150 tonnes per day (TPD) from 2,850 TPD at present over the next 27-months.
Two units will be set up, one in Andhra Pradesh and the other in either Maharashtra or Gujarat, he said.
HNG, which makes glass bottles mainly for liquor (60 per cent), followed by food and pharmaceutical sectors, has plants at Rishra (West Bengal), Bahadurgarh (Haryana), Rishikesh (Uttarakhand), Neemrana (Rajasthan), Nashik (Maharashtra) and Puducherry.
The company has earmarked a capex of Rs 2,900 crore for capacity expansion over the next six years. It plans to scale up its capacity to 5,300 TPD by then.
With this, it expects around 11 per cent growth in both its top and bottomline this fiscal. The company's revenue stood at Rs 1,600 crore in FY10.
