Mumbai : Pharma solutions provider Bilcare AG on Monday said that it has entered into a binding agreement with INEOS Group to acquire its Global Films business for Rs607-crore, reports PTI.
INEOS, a leading pharma and specialty films business with annual sales of Rs1,458-crore, has entered into the agreement to bring together complimentary capabilities and synergies of two leading global businesses, a press release issued here stated.
"This acquisition is a paradigm shift in the pharma packaging space and a significant step towards creating a customer-centric company to deliver path-breaking innovations and establish global leadership," Bilcare's chairman, Mohan Bhandari, said.
The deal comprises the business, assets and personnel related to INEOS' Films operations located in North America, Europe and Asia.
"Bringing together Bilcare's research and development focus with our own broad production and application knowledge provides a very strong strategic fit. This agreement will put INEOS Films assets and people at the centre of a new business with the innovation and drive necessary for it to grow and further develop, which is good for the business and its customers globally," INEOS Films CEO, Iain Hogan, said.
The transaction is proposed to be effected through a merger process in Germany, in relation to the German company and its subsidiaries. The transaction is expected to be completed by the end of August.
Ratings agency CRISIL said The base rate mechanism, which now replaces the benchmark prime-lending rate (BPLR) mechanism, is likely to make working capital borrowing from banks more expensive for corporates than accessing funds from the capital markets.
According to a CRISIL study of the working capital requirements of India's corporates, switching to commercial papers (CP) will assist corporates save interest costs, thereby resulting in a one percentage point increase in their profits, it said in a release.
Corporates are likely to switch to CPs to fund short-term working capital requirements under the base-rate mechanism. Somasekhar Vemuri, head, CRISIL Ratings, said, "By making this switch, CRISIL estimates that corporates can save as much as Rs11.7 billion in interest expenses - equivalent to around 1% of their net profits. These savings may be higher during periods of abundant liquidity".
The supply of CPs from corporates was low in the past; corporates had the flexibility to avail of funds from banks at rates that were on par with CP rates under the erstwhile BPLR regime. Now, with that flexibility no longer available under the base-rate mechanism, corporates are likely to issue a larger quantum of CPs, the ratings agency said.
CRISIL said its analysis reveals that corporates with ratings of 'P1' or higher, have rupee-denominated working capital bank borrowings of around Rs1,800 billion as on 31 March 2010, all of which potentially can be replaced by CPs.
"CRISIL believes that the additional comfort of liquidity backup, combined with historically robust credit quality, makes CPs rated 'P1+' and 'P1' by CRISIL attractive investment options for Mutual funds (MFs), even on a risk-adjusted basis. Under the base-rate regime, MFs can consider lending to corporates directly by subscribing to CPs. Banks, too, are likely to invest aggressively in CPs, to retain corporate customers, thereby adding to the overall demand for CPs," said Raman Uberoi, Senior Director, CRISIL Ratings.
Short-term instruments rated 'P1+' and 'P1' by CRISIL, have displayed robust credit quality over the past decade; the one-year default rate for such ratings during the period 2000-2009 has been zero, the ratings agency said.
Coimbatore: Consumer durables major Videocon is setting up a TV manufacturing unit at Manamadurai in Tamil Nadu with an investment of Rs1,500 crore, reports PTI.
A memorandum of understanding to this effect would be signed in the presence of Chief Minister M Karunanidhi on August 4 at Chennai, Industries Department sources said.
Similarly, MoUs would be signed on that day for a Rs 1,500 crore tyre manufacturing unit of JK Tyres and an LNG Terminal at Ennore by Indian Oil Corporation, the sources said.