Gobain To Pick Up 51% In Mah Glass

After dilly-dallying for six months, Sekurit Saint Gobain, the $14 billion French industrial conglomerate has finally decided to increase its stake in Maharashtra Glass and Agro Ltd from 26 per cent to 51 per cent.

The delay in picking up a majority stake in Maharashtra Glass will actually help Saint Gobain save over Rs 2.26 crore as the formers share prices have tumbled following the depressed stock market conditions.

Earlier in May 1997, Saint Gobain was to pick the shares at around Rs 25 per share as against around Rs 20 decided now, as per the Sebi formula of average market price of the scrip.

 

The board of directors of Maharashtra Glass have already decided to issue 45,32,700 preferential shares to Gobain. The French conglomerate will bring in Rs 9.06 crore as additional equity to pick a majority stake of 51 per cent in Maharashtra Glass at a price of around Rs 20 per share.

Another 4,46,300 preferential shares are being allotted to Grindwell Norton Ltd, constituting 3.43 per cent of the total equity, also at around Rs 20 per share. The company had called for an extra-ordinary general meeting at Chinchwad near here yesterday to get the shareholders approval to make the preferential allotment. Atul Gulati, managing director of Maharashtra Glass and the main promoter of the company will see his equity holding dropping from 14.31 per cent to 8.81 per cent after the allotment of preferential shares.

Maharshtra Glass is a leading producer of laminated safety automotive windshields with a capacity to produce five lakh pieces and 24 lakh pieces of sidelights per annum. It recently set up a new plant to manufacture floatglass with Saint Gobain technology at Chakan near here, at a cost of Rs 38 crore. The Chakan plant was started after much delay resulting in cost-overrun.

The company has another plant at Bhosari near Pune, which manufactures toughened safety glass for the automobile industry. It also manufactures 4.5 lakh pieces of curved glass and three lakh square metres of floatglass.

The companys Faridabad manufacturing facility has been modernised and expanded to produce 1.5 lakh units of laminated safety windshields with know-how from the French company.

In fiscal 1996-97, Maharashtra Glass posted a loss of Rs 7.36 crore on a turnover of Rs 22.90 crore. The company has blamed the low capacity utilisation of its new laminated safety glass plant at Chakan and high interest cost as the main factor for the losses suffered by it.