Alfa Laval not to hike Pune unit’s share rate

Alfa Laval not to hike Pune unit’s share rate
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First Published: Wed, Apr 18 2007. 01 22 AM IST
Updated: Wed, Apr 18 2007. 01 22 AM IST
New Delhi: Alfa Laval AB, the world’s largest manufacturer of heat exchangers, used in oil refining and air conditioning, won’t increase the price it has offered to buy more shares in its Indian unit to reflect the stock’s current price.
There is no change in the plan to pay minority shareholders of Alfa-Laval (India) Ltd Rs875 per share in the buy-back that opens on Thursday (19 April), chief financial officer Thomas Thuresson said in a phone interview on 17 April from Lund, Sweden, where the company is based.
“If we look at the developments since we launched the offer, really nothing happened for most of the seven weeks that have elapsed,” Thuresson said, explaining the company’s decision not to sweeten the offer to minority investors.
“The closing today is an indication that people are speculating on a change in the offer price, but I can only repeat that there are no such intentions,” he added.
Shares of the Indian unit closed at Rs981.60 apiece on 17 April on the Bombay Stock Exchange, a 12% premium over the offer price announced seven weeks ago.
The buyout plan for 47 lakh shares, or 25.9% of Alfa-Laval India’s equity, seeks to raise the parent company’s control of the unit to slightly below 90%.
Shares of the local unit of Alfa-Laval, based in Pune, have gained by a fifth since the Swedish company sought to centralize control of the unit that employs about 1,000 people. The immediate motivation for raising ownership is to secure higher returns for the parent company from India, the world’s second-fastest growing major economy.
“We believe India as an economy is very interesting,” Thuresson said. “We want to get our fair share, the best possible share, of the development in India.”
Alfa Laval’s offer to take over its Indian unit comes at a time when chief executive officer Lars Renstroem is shifting output to locations such as China and India where labour is less expensive.
One-third of the world’s ships carry some kind of Alfa Laval equipment, which includes products to treat bilge water on vessels, cleanse chemical tankers and filter fuel to protect engines.
Alfa Laval, which also owns an engineering subsidiary in India, started its operations in Asia’s fourth-largest economy in 1937.
Its offer, aimed at about 11,000 investors, runs until 8 May. Five of these investors hold about 16% of the total shares, the company said in February.
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First Published: Wed, Apr 18 2007. 01 22 AM IST
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