Time Technoplast buys Bahrain firm for $10 mn

Technology-based polymer products company, Time Technoplast (TTL) has acquired Bahrain-based battery manufacturer Gulf Powerbeat WLL for $10 million. The acquisition was made by the Mumbai-based compnay through its Hyderabad subsidiary NED Energy (NED).

According to a release issued by TTL to the BSE today, GPW has a state of the art production facility for the manufacture of long life batteries. The total investment in the Bahrain project is estimated at $10 million to be made over the next 3 years and to be financed through a mix of equity contribution from NED and raising debt overseas.

The company was owned by a reputed business family of UAE who offered to disinvest in battery business to remain focused on their large size projects in areas like finance and real estate.

The new acquisition of GPW will provide NED 'ready to use' capacity which could be integrated fully with NED's operation in the next 3 months. 

TTL entered into the battery business in October through its acquisition of 71% holding in NED for Rs 50.30 crore, which manufactures valve regulated lead acid (VRLA) batteries mainly for the telecom sector.

GPW has installed capacity for telecom and automotive batteries of up to 150 million AM with surplus capacity to produce vital battery components (grids and lead plates) of additional 250 million AH.

NED plans to triple its current capacity to 300 million AH from 100 million AH currently to meet the huge demand of its products and to further bring new products for the fast growing automotive sector.

In the first phase, NED plans to tap the Gulf Co-operation Council (GCC) market for automotive batteries and bring additional components into India to augment the capacity of its Hyderabad plant to 200 million AH.

NED's project expansion in Jammu by the second quarter of the next financial year would also aid further increase in capacity.

TTL had entered into an agreement with NED, a closely-held company engaged in the manufacture of valve regulated lead acid (VRLA) batteries, to purchase 4.289 million shares (71.48%) of the existing share capital from the latter's promoters at a price of Rs 103.33 per share aggregating Rs 44.31 crore, besides subscribing to 0.58 million additional shares at Rs 103.33 per share at an aggregate value of Rs 6 crore.

The existing promoters will continue to hold 26% of the equity capital of NED. The company, enterprise value of which is estimated at Rs 65 crore, registered a turnover of Rs 4.5 crore with a net profit of Rs 3.3 crore for 2006-07. It expects to garner Rs 60 crore revenues with a net profit of Rs 5.5 crore during 2007-08. 

The domestic automotive battery market is pegged at Rs 1,600 crore while the telecom battery market is estimated to be Rs 985 crore, in which NED has a five per cent market share.  The telecom sector is growing at a rate of 40% and the demand for telecom towers is expected to touch 3.3 lakh by 2010, from the present 1 lakh.

TTL, which posted a net profit of Rs 41.4 crore on a turnover of Rs 456.9 crore in 2006-07, expects its net profit to touch Rs 75 crore and its revenues to exceed Rs 700 crore for the year-ended March 2008.