CUMI goes shopping again. Might sell unproductive assets to fund acquisitions
By Our Corporate Bureau | 21 Aug 2007
Chennai: Continuing its acquisitive growth strategy, the city based Rs526.77 crore turnover Carborundum Universal Limited (CUMI) will buy the industrial ceramics division of IVP Limited.
The two parties have inked a business purchase agreement and the deal is expected to be concluded shortly.
While CUMI is part of $2 billion Murugappa group, IVP is part of Allana group.
The ceramics division of IVP is located in Aurangabad and makes high alumina engineered ceramic products like igniters, seals, thread guides, nozzles with technology from Feldmuhle, Germany. The 40-worker plant has a capacity to produce 200 tonne per annum, which translates to around Rs12 crore worth of industrial ceramics.
Though CUMI is the largest high alumina ceramic producer in India, the acquisition of IVP's facility will fetch it the German technology and the product range the company currently does not have. As to the strategy, CUMI will first understand the technology and later scale up the operations by infusing additional funds.
With the acquisition of Volzhsky Abrasives Works, Russia, on the anvil, and its other capex programmes requiring sizeable investment, CUMI has plans to sell some of its unproductive assets and financial investments.
The company has definitive ideas to sell around 70 grounds it owns in Pallikaranai, in Chennai. CUMI is also planning to raise external commercial borrowing (ECB) for part funding the Russian acquisition.
