Voltas to buy out 2 firms

Voltas, a Tata Group company, today announced that it will acquire the remaining equity stake in two companies, Universal Comfort Products (UCPL) and Saudi Ensas Company (SECL), from its joint venture partners. The companies will become Voltas' wholly-owned subsidiaries, following the acquisition.

Voltas will buy its joint venture partner, US-based Fedders International's 50 per cent stake in UCPL for Rs 7.5 crore. UPCL manufactures room air-conditioners and split air-conditioners.

Voltas will also buy the remaining 51 per cent in SECL from its Saudi Arabian JV partner. Voltas will receive the equity free of cost as the transfer of the foreign company's stake is a part of the latter's financial restructuring.

Voltas has informed the stock exchanges about these developments, but its executives declined to comment on the issue.

The announcement pushed up the Voltas' stock by 3.23 per cent on the Bombay Stock Exchange. The shares of the company closed at Rs 244.15 against the previous close of Rs 236.50.

Voltas has been in and out of JVs in the past couple of years. In 2005, the company had transferred its entire 50 per cent shareholding Sermo-PM India (SPMIL) to its JV partner Sermo Montaigu, France.

In 2006, the company formed a strategic partnership with Netherlands-based storage technology specialist, Besseling Group to deliver turnkey solutions for long-term storage of horticulture produce.

Voltas sold one of its subsidiaries, Simtools to real estate developer Lodha Group this year for Rs 78.44 crore. Simtools had become a wholly owned subsidiary of Voltas in 2004.

The main focus of Voltas has been on organic growth. The company has 25 per cent market share in the domestic air conditioning business. Voltas' core-business, involving electro-mechanical projects and services, contributes 56 per cent to its revenues. It has spotted opportunities in heating, ventilation and air-conditioning (HVAC) and mechanical, electrical and plumbing (MEP) businesses.

Voltas registered a turnover of Rs 1,904.18 crore last year and its order book (as on March 2006) stood at about Rs 1,850 crore. This includes international orders in Abu Dhabi, Bahrain and Dubai.