Yash Birla group buys stakes
Yash Birla group buys out Kennametal in local JV. Pays Rs 100 Cr For US Firm’s 44.5% In Birla Kennametal.
By Rajesh Unnikrishnan, TNN |
MUMBAI: The Yash Birla group has bought the entire 44.5% stake held by US-based Kennametal in its JV firm Birla Kennametal for approximately Rs 100 crore. After the purchase, Yash Birla group holds 88.48% in the Mumbai-based auto component firm. The group has routed the stake purchase through Shearson Trading & Investment Company, an investment arm of the group.
“The equity purchase is part of the ongoing restructuring exercise. Though Kennametal exited from the JV, our business relations will continue. Kennametal will source majority of our products for the next five years for their global supply,” Praveen Gupta, CEO, auto component and engineering division, told ET.
The Yash Birla group is in the process of restructuring its Rs 2,500-crore business empire that spreads across many sectors like engineering, auto component, textile, power and lifestyle. The restructuring exercise among six listed and 14 unlisted entities will see mergers, formation of holding companies and acquisitions.
The group is forming a holding company merging its auto component firms — Birla Kennametal, Dagger Forst, ITM and Birla Peruccini — as a single entity. The group is investing around Rs 200 crore for the expansion activities of the four companies.
“The equity purchase from Kennametal is the first step in the group restructuring. We are very upbeat about this sector and are going to invest considerably in the coming years to ensure that this pace and momentum of growth is maintained,” Birla group officials said. Currently, Birla Kennametal is expanding its manufacturing capacity and entering into new product categories.
Birla Kennametal, established in 1986, manufactures a wide range of components like precision AT3 class steep taper, and HSK tooling, as well as work-holding products at Aurangabad facility in Maharashtra. During the quarter ended June 2007, the company recorded a jump of over 59% in its sales turnover from Rs 15.37 crore last year to Rs 24.79 crore this year.
“The equity purchase is part of the ongoing restructuring exercise. Though Kennametal exited from the JV, our business relations will continue. Kennametal will source majority of our products for the next five years for their global supply,” Praveen Gupta, CEO, auto component and engineering division, told ET.
The Yash Birla group is in the process of restructuring its Rs 2,500-crore business empire that spreads across many sectors like engineering, auto component, textile, power and lifestyle. The restructuring exercise among six listed and 14 unlisted entities will see mergers, formation of holding companies and acquisitions.
The group is forming a holding company merging its auto component firms — Birla Kennametal, Dagger Forst, ITM and Birla Peruccini — as a single entity. The group is investing around Rs 200 crore for the expansion activities of the four companies.
“The equity purchase from Kennametal is the first step in the group restructuring. We are very upbeat about this sector and are going to invest considerably in the coming years to ensure that this pace and momentum of growth is maintained,” Birla group officials said. Currently, Birla Kennametal is expanding its manufacturing capacity and entering into new product categories.
Birla Kennametal, established in 1986, manufactures a wide range of components like precision AT3 class steep taper, and HSK tooling, as well as work-holding products at Aurangabad facility in Maharashtra. During the quarter ended June 2007, the company recorded a jump of over 59% in its sales turnover from Rs 15.37 crore last year to Rs 24.79 crore this year.
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