Gujarat Glass Ltd, a part of the Piramal Enterprises group that owns Nicholas Piramal India Ltd, has acquired a 51 per cent stake in Colombo-based Ceylon Glass for a consideration of Rs 19.5 crore. The Rs 45-crore Ceylon Glass makes glass packaging for pharmaceuticals, food, beverage and perfumes.
The Indian company will buy 39 per cent of Ceylon Glass from Sri Lanka's DFCC Bank and the remaining 12 per cent will be acquired through a public offer. Both transactions will be made at Sri Lankan Rs 23 per share (Rs 13.80 in Indian currency). If the public offer fails to garner the required stake, DFCC Bank will off-load an additional 10 per cent in favour of Gujarat Glass.
"Ceylon Glass has a good reputation and a large market share, and we feel that we can add value by further improving the quality," says Ajay Piramal, chairman, Piramal Enterprises.
"We wish to internationalise the operations of our glass business, moving into markets where our competitive advantage tells," he says. Ceylon Glass has a capacity to manufacture 100 tonnes per day. The company's net profit is equivalent to Indian Rs 2.44 crore.