Hsbc Equity Picks 27% In Kurlon, 39% In Sal

HSBC Private Equity India Fund (HPEIF), a member of the HSBC Asset Management Group, has picked up over a quarter of the equity in Kurlon, Indias leading manufacturer of branded mattresses, and about 39 per cent stake in Synergies Automotive (SAL), the countrys first aluminium wheel plant, at a total investment of about $10 million.

During the last fortnight, HPEIF invested $4 million to buy a 27 per cent shareholding in Kurlon.

And it invested another $5.5 million for a 39 per cent stake in SAL.

SAL is a start-up joint venture between South Koreas DooRay Corporation and an Indian firm, Shekhar Movva and Associates, to supply aluminium wheels primarily to the Korean car market.

 

HPEIF said it is currently experiencing a strong dealflow at sensible prices and pointed out that two further investments totalling $12 million are in due diligence.

By the end of the calendar year 1997, it expects to invest $35 million in the country, 60 per cent of the Fund, in seven separate ventures.

HPEIFs funds in Kurlon will be used to finance two new manufacturing units scheduled to commence production in May 1998.

The units are part of Kurlons expansion of its product range to include polyester and spring mattresses, following its recent joint venture with DuPont of the United States.

The factory being built by Synergies Automotive Ltd (SAL) will cater to the Korean car market under a buy-back agreement entered into by DooRay Corporation.

It will have a capacity of 6,70,000 wheels per annum and is expected to begin production in February 1998.

HPEIF had earlier struck three deals during the year 1997. In March, it made by far its largest investment of $7 million in the ordinary shares and unsecured fully convertible bonds to pick up 18 per cent stake in the Gujarat-based Shree Rama Multi-Tech, an integrated manufacturer of plastic tubes, laminates and labels used in the dental, cosmetic and food industries.

The company has technological alliances with AISA of Switzerland, Japans Fujimori Kogyo and Taiyo Kikai and the US-based Barrier Film Inc.

The Fund also invested $4.2 million in unsecured fully convertible bonds of Carborundum Universal, a Muruggapa group company, to buy about 8 per cent of the companys equity. It also invested $2.2 million in the Chennai-based MAC-CWT Distriparks during the year.