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Asahi to buy out Tata, ACC stake in Floatglass

Reeba Zachariah & Rumi Dutta

The Tatas and the Associated Cement Companies have finalised a deal to exit the ailing Floatglass India. The duo holds over 28 per cent in the company, ACC alone holding around 13 per cent. Asahi Glass of Japan, a co-promoter and the single largest stakeholder, will buy their stakes.

Asahi, which holds around 49 per cent, will also buy out the preference shares held by the co-promoters. Floatglass has informed the Bombay Stock Exchange that Asahi Glass and the other co-promoters will reach a final agreement on April 16.

However, the price at which the deal is being struck could not be ascertained. The Floatglass stock closed at Rs 5 on the BSE on Friday.

ACC, which was instrumental in getting the Tatas into the JV with Asahi, decided last year to get out of the company so as to focus on its core business of cement.

The Tatas, who hold their stake through Tata Sons, also decided to exit as part of the restructuring of the group. "We were in Floatglass because of our earlier relationship with ACC. Since they decided to exit, there is no reason for us to remain," a senior Tata official said.

One of the primary reasons for ACC's decision is that Floatglass has been sinking deeper into the red almost every year. For the year ended March 2000, it posted a loss of Rs 417 million, up from Rs 348 million the previous year.

The company has outstanding liabilities of Rs 3.04 billion for the last year. Its accumulated losses of Rs 2.67 billion are more than 50 per cent of the net worth of Rs 2.87 billion.

As a result, it has been reported to the Board for Industrial and Financial Reconstruction.

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