Rieter to exit Indian joint venture with LMW
Swiss company Rieter has decided to exit its 17-year-old joint venture with Lakshmi Machine Works by selling its 50% stake to the latter.
By ET Bureau | Updated:
CHENNAI: Swiss company Rieter has decided to exit its 17-year-old joint venture with Lakshmi Machine Works by selling its 50% stake to the latter.
The development was expected after Rieter recently sold a major chunk of its stake in LMW in a buy back. And it comes a day after the Indian government relaxed norms for FDI, allowing foreign companies, which have a JV in India, to set up a subsidiary without a no-objection certificate from the Indian partner.
As per the agreement signed in Coimbatore on Sunday, Rieter will sell its stake in Rieter-LMW Machinery, the JV company formed in 1994 as a 100% export oriented unit for Rieter ring frame assemblies, at a valuation to be decided by June end.
Post the transaction, RLM would become a wholly-owned unit of LMW, which would continue to utilise the facility for manufacture of textile spinning machinery.
The development was expected after Rieter recently sold a major chunk of its stake in LMW in a buy back. And it comes a day after the Indian government relaxed norms for FDI, allowing foreign companies, which have a JV in India, to set up a subsidiary without a no-objection certificate from the Indian partner.
As per the agreement signed in Coimbatore on Sunday, Rieter will sell its stake in Rieter-LMW Machinery, the JV company formed in 1994 as a 100% export oriented unit for Rieter ring frame assemblies, at a valuation to be decided by June end.
Post the transaction, RLM would become a wholly-owned unit of LMW, which would continue to utilise the facility for manufacture of textile spinning machinery.
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