Indian paint major Kansai Nerolac has entered into a joint venture agreement with Nepal Shalimar, to acquire a 68-per cent stake in the Nepalese paint major for around Rs7.55 crore (Nepalese Rupee 12.58 crore), Kansai Nerolac Paints Ltd informed the Bombay Stock Exchange (BSE) in a filing today.
Further, Kansai Nirolac has agreed to give a loan of Rs6.12 crore (Nepalese Rupee 10.20 crore) to fund the working capital requirements of NSPL.
Considered to be among the top 5 companies in Nepal, NSPL had a turnover of Rs12.34 crore (NPR 20.57 crore) in 2010-11 and currently commands a market share of 8 per cent in that country.
"With KNPL's entry in the Himalayan state, our consolidated profit would improve and in turn increase EPS, which will benefit shareholders," H M Bharuka, managing director of Kansai Nirolac, said on the synergy between the two companies.
KNPL will utilise the manufacturing set-up of Nepal Shalimar for manufacturing the Nerolac range of products that is currently being exported to Nepal.
The investment in NSPL is subject to regulatory and other approvals both in Nepal and India, the release added.