The Hindu : Business : EID to hive off Parryware division into a subsidiary

Online edition of India's National Newspaper
Friday, Oct 21, 2005

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Business

EID to hive off Parryware division into a subsidiary

Special Correspondent

Looking for strategic foreign partner to strengthen brand

CHENNAI: EID Parry (India) Ltd., a Murugappa group company, has decided to spin off its Rs.200-crore Parryware division into a wholly owned subsidiary to facilitate the induction of a strategic foreign partner.

This decision was taken at a board meeting held on Thursday.

Maintaining leadership

The hive-off proposal, however, is subject to approvals by the shareholders and other regulatory agencies.

A release from the company said that the management was currently in discussions with `interested international players' for a strategic partnership.

The objective of the move was to strengthen the Parryware brand and maintain market leadership by introducing better products and improving technology and processes.

According to K. E. Ranganathan, CEO, Parryware Division, the hive-off move was necessitated by the opportunities for growth. "With the entry of foreign players into the field, the market dynamics had changed. The division posted revenue of Rs. 196 crore last year and was set to register a 40 per cent growth this year, Mr. Ranganathan said.

Parryware has three factories and employs over 1,500 people.

D Kumaraswamy, Vice-President (Finance), EID Parry, said that the assets of Parryware would be transferred at book value to the new subsidiary.

EID Parry, on Thursday, said its turnover for the half-year ended September 30, 2005 stood at Rs. 375.19 crore (Rs. 273.38 crore).

The profit before tax was Rs. 54.09 crore (Rs. 62.63 crore, which included a one-time income of Rs. 23.12 crore, representing a profit on sale of shares, undertaking) after providing for interest cost of Rs. 4.21 crore (Rs. 1.53 crore) and depreciation of Rs. 14.81 crore (Rs. 13.68 crore).

The profit after tax for the current half-year was Rs. 39.72 crore (Rs. 49.92 crore).

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