By BizLED Bureau
Dec 10, 2015: Havells India, a leading manufacturer of lighting and electrical products, will divest its majority stake (around 80%) in Sylvania, acquired in 2007. The company is negotiating with some of the leading global players in the lighting industry and private equity firms. According to an official, the deal is expected to be complete shortly. Havells now wants to focus mainly on the Indian market.
“The equity value of this deal would be more than what Havells paid as equity to take over Sylvania,” he said, adding that Sylvania’s equity value would be around Rs 10,000 million. In the first phase, Havells would divest its major stake with management control to the strategic investors and sell the remaining stake in the next few years, depending on several factors,” the official said.
Havells had acquired Sylvania for an enterprise value of £227 million and had invested £80 million as equity. During the last seven years, it put £60 million more. “Through this move, Havells India’s plans to increase its focus on the domestic market. With huge demand in India, Havells’ new mantra will be to focus on the domestic market and if there are new opportunities, we may re-enter the overseas market,” the official said.
Havells India shares slipped 1% to close at Rs 292.25 on the BSE, giving it a market capitalisation of Rs 18,2540 million. The benchmark BSE Sensex declined 0.86%. Havells India reported a net profit of Rs 3850 million on net revenue of Rs 85,690.4 million in FY15 against a net profit of Rs 4460.3 million on a turnover of Rs 81,850.8 million in the previous year while Sylvania reported a turnover of £443 million in FY15 against £440 million in previous year.