ICI sells 51% in rubber chem business

ICI India announced today that it would transfer its rubber chemicals business to a joint venture company.

The US based PMC Group International will pay Rs 8 crore to ICI for acquisition of a 51 per cent stake in the joint venture while ICI will retain 49 per cent stake.

Informing this to the Bombay Stock Exchange, ICI India said the board of directors took the decision today "to protect the long term interest of the business." The transfer is subject to necessary approvals.

Established at Rishra in West Bengal in 1964, the rubber chemicals division earned Rs 106 crore last year including export of Rs 22 crore.

About 200 employees associated with the business would be transferred to the joint venture company with continuity of service on terms at par with the current ones, the company informed the stock exchange.

The shareholders agreement between ICI and the PMC group envisages that ICI will have a put option while PMC will have a call option.

The value of the options will be determined by the performance of the joint venture. ICICI Securities advised the PMC Group on this deal.

The transaction is expected to be implemented in few months after receiving all the necessary approvals including the approval of the shareholders.