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SRF to buy two businesses of SRF Polymers

15
Dec '08

SRF Limited, the domestic market leader in technical textiles, refrigerant gases and a preferred supplier of other fluorochemical products and polyester films, has announced its decision to purchase the two businesses of SRF Polymers Limited (SRFP), the Engineering Plastics Business (EPB) and the Industrial Yarn Business (IYB).

The decision to purchase on 'a going concern' basis at a total cost of Rs. 151.60 crore was taken by the SRF board in a meeting held on the last Friday on the basis of a valuation conducted by KPMG India Pvt Ltd, one of the major international accounting and consulting firms.

The effective date for the transaction shall be 1st January 2009. Earlier in October 2008, the board of SRFP had informed the stock exchange about its decision to seek approval of the shareholders through postal ballot for disposing of its both the businesses.

With this business acquisition, SRF's turnover will increase from nearly Rs. 1700 crore to about Rs. 2000 crore, and will enable further consolidation through greater synergies between businesses. In particular, SRF will provide the necessary financial resources for expansion of EPB which is a growing industry. Besides, EPB has a strong linkage to the auto sector & the consumer durables sector and is the domestic market leader in its segments. While SRF's acquisition of IYB will add to its product portfolio under Technical Textiles Business, it would also reduce the company's dependence on the tyre cord business.

EPB with two production units, one at Manali and the other one at Pantnagar, has an annual combined compounding installed capacity of manufacturing 15,000 tonnes of different grades of Nylon 6, Nylon 66 and Polybutylene Terephthalates (PBTs). IYB on the other hand has one manufacturing facility with an annual manufacturing capacity of around 2000 tonnes of twine located adjacent to the complex of SRF Technical Textiles plant at Manali.

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