MUMBAI, SEPT 27: The Reliance group of the Ambanis has entered into an agreement to acquire the Singhania group flagship Raymond's entire 36 per cent stake in Raymond Synthetics Ltd (RSL) for Rs 22.33 crore. Silvassa Yarn & Investments, belonging to the Reliance group, will buy out Raymond's stake at Rs 5 per share and subsequently make a 20 per cent open offer to shareholders of Raymond Synthetics, leading to an outgo of another Rs 12.4 crore.After the public offer, the Reliance stake in RSL is expected to touch 56 per cent. With this acquisition, the polyester filament yarn (PFY) capacity of Reliance Industries would rise by 30 per cent. ``It would utilise Raymond Synthetics polyester capacities under a long term conversion agreement, in which Reliance would supply the basic raw materials (PTA and MEG) for the entire polyester capacity of Raymond,'' Reliance said.Raymond Synthetics has an outstanding debt of over Rs 524 crore as on March 31, 1999. This includes institutional loans of Rs 199.84 croreand forex loans of Rs 115.67 crore. Loans from other corporates is in excess of Rs 129 crore. The Rs 437-crore Raymond Synthetics had an interest burden of Rs 48.3 crore last year and negative reserves of Rs 89.31 crore till last fiscal-end. Raymond Synthetics has been defaulting on loan repayment for over a year and had sought institutional approval for loan reschedulement. The institutions had then put pressure on the Singhanias to sell out.With the addition of Raymond polyester capacity, Reliance's annual capacity is slated to increase from the current 228,000 tonnes per annum to around 300,000 tpa making it the fifth largest PFY producer in the world. In terms of the domestic market, Reliance's market share would further increase from 25 per cent to 32 per cent, it added.Raymond Synthetics is the fourth largest polyester producer in India with capacities to produce 66,000 tpa of PFY and 8,000 tpa of polyester chips. Its plant is located at Karchana in the Allahabad district of UP. The manufacturingfacilities are based on technology licensed from Toray of Japan. ``The domestic PFY capacity is highly fragmented with 38 producers currently, and Reliance's move would further consolidate the fragmented structure of the Indian polyester industry,'' said a Reliance statement, adding that this move would also enhance the overall competitiveness of the sector.Over the last few years, Reliance has consolidated its polyester staple fibre (PSF) capacities by acquiring 30,000 tpa from ICI, 24,000 tpa from India Polyfibres Ltd and 43,000 tpa from JK Corp ltd. This is the first major instance of expansion of Reliance's production base for PFY. ``Reliance's latest acquisition reaffirms its plan to double its polyester capacity over the next three years and emerge as one of the top three polyester producers in the world,'' Reliance said.HLL acquires `Coco Care' oil brandMUMBAI: Hindustan Lever Ltd (HLL) has acquired the `Coco Care' brand of coconut oil from Recon Oil Industries Ltd. Coco Care, with its8 per cent market share, is the fourth largest player in the country and second largest in the West zone, a statement from Recon Oil said. Commenting on the acquisition, a statement from HLL said the agreement which comes into effect from September 25 does not involve purchase of any manufacturing facilities and distribution assets or transfer of employees of Recon Oil Industries.With this acquisition, which is effective September 25 this year, HLL's overall market share has increased to over 20 per cent. HLL, with its coconut oil brand Nihar, is currently the second largest player with a 14 per cent share in value. The acquisition thus brings HLL a step closer to market leader Marico Industries whose Parachute brand coconut oil commands a 53 per cent market share. While the companies are tight-lipped on the price at which the acquisition has taken place, industry sources peg the figure at around Rs 40 crore.
