AB Electrolux, ailing Swedish white goods company,
plans to put in funds to the tune of Rs 500 crore into
Indian consumer durables major, Videocon Industries. The
latter is taking over the manufacturing facilities of
its Indian subsidiary, Electrolux India.
Videocon will use the Rs 500 crore cash to retire the
Indian subsidiary's debts and will be given compensation
to the tune of Rs 160 crore for tax incentives that may
not accrue to Videocon following the sale of the Electrolux
plant in Boutibori, Pune. It's not clear if the Rs 160
crore is part of the Rs 500 crore.
is expected to get the Kelvinator brand on a 25-year lease
with no royalty payment, while the Electrolux brand will
be given on a five-year lease where some royalty will
be paid. The deal
also involves Videocon becoming a major original equipment
(OE) supplier for Electrolux's global requirements.
is focusing on India as a low-cost manufacturing base
for its global requirements.