Jyothy Laboratories to acquire majority stake in Henkel India

Jyothy Laboratories had earlier acquired 14.9% stake in Henkel India from the Indian promoter Tamilnadu Petroproducts in March 2011

The board of directors of Jyothy Laboratories (JLL) has approved the buy-out of 50.97% stake in Henkel India (HIL) from Henkel AG & Co KGaA (Henkel AG). JLL had earlier acquired 14.9% stake in HIL from the Indian promoter Tamilnadu Petroproducts in March 2011.

In a deal structured by MAPE Advisory Group, JLL  proposes to acquire 59,360,203 equity shares, constituting 50.97% of Henkel India at a price of Rs20/share aggregating Rs118.7 crore.

JLL will refinance the existing debt of HIL as also buy out the redeemable cumulative preference shares in HIL held by Henkel AG. The aggregate debt owed by Henkel India to its lenders is approximately Rs454 crore. JLL will purchase 68 million preference shares in HIL from Henkel AG for Rs43.9 crore, subject to regulatory approvals. The per share equity consideration payable to Henkel AG is subject to customary closing adjustments based on the debt and cash position in HIL.

Further, JLL and Henkel AG have agreed that Henkel AG shall have an option to acquire up to 26% of the equity share capital of Jyothy Laboratories through primary and/or secondary transactions, after five years, subject to the terms and conditions to be mutually agreed.

This acquisition will trigger the mandatory 20% open offer to the public shareholders of HIL as per applicable SEBI regulations. MAPE Advisory Group will be the manager for the public offer.

Both JLL and HIL have strong synergies in various business segments, as both are present in home care, fabric care, dish wash, personal care and household cleaning segments and the acquisition will elevate JLL to amongst the top five FMCG players in India. With its array of well-known brands like Ujala, Exo and Maxo, JLL enjoys a dominant position in all its categories. With this acquisition, JLL will add to its stable internationally renowned brands like Henko, Pril, Fa & Mr White and popular Indian brands like Margo, Chek & Neem.

MP Ramachandran, chairman & managing director, JLL said: “This is a historic and much anticipated move from Jyothy Labs which will help us in strengthening our position in urban India. It will also give us access to any new product launches of Henkel AG & Co KGaA in the future.”

Shares of JLL were trading at around Rs221.90 on the Bombay Stock Exchange in the late afternoon, 0.07% down from the previous close.

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Hexaware declares 25% interim dividend

The record date is fixed as 28 May 2011 for determining the shareholders entitled for the interim dividend

Hexaware Technologies, a leading global provider of IT, BPO & consulting services, has announced 25% interim dividend.

Hexaware is a financially strong company with net cash balance in excess of $100 million. Accordingly the board of directors has declared a liberal dividend policy to reward its 84,000+ shareholders. Now, the company intends to distribute a high proportion of cash generated through operations as dividend.

Further, the board of directors declared an interim dividend of 0.50 paise per share (25%) on equity shares of Rs2 each. The record date is fixed as 28 May 2011 for determining the shareholders entitled for this interim dividend. This interim dividend shall be paid to the eligible shareholders on 3 June 2011.

The final dividend of Rs1.40 per share (70%) for CY2010 was approved at the annual general meet held on 27 April 2011 and has now been paid to all the entitled shareholders. The total dividend for 2010 was Rs2 per share (100%), excluding the special dividend of Rs1 per share (50%), up from Rs1.40 per share (70%) for the year 2009.

Last week, Hexaware reported strong performance for Q1 2011 with healthy revenue growth of 45% Y-o-Y and 5.8% Q-o-Q sequentially in dollar terms to $70.4 million exceeding the quarterly revenue guidance. During the previous quarter, there was an across the board margin expansion of 280 basis points in gross margins, EBIT margins expanding 310 basis points to 12.4% and profit after tax margins expanding 370 basis points to 16.9%. Further, the company upgraded its revenue outlook for 2011 to a minimum of $295 million, an annual revenue growth of at least 27.5% compared with 2010.

Shares of Hexaware were trading at around Rs67.75 on the Bombay Stock Exchange in the late afternoon, 2.42% up from the previous close.

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Jindal Steel Bolivia, Midrex to construct world’s largest capacity single direct reduction module

JSPL had secured the development rights of El Mutun mines, one of the world’s single biggest iron-ore deposits with reserves of more than 40 billion tonne, in 2007

Jindal Steel Bolivia, a subsidiary of Jindal Steel & Power (JSPL), will build a 2.52 MMTPA natural-gas-based Midrex Direct Reduction Plant in the first unit at EL-Mutun in Bolivia. The new Midrex Plant will be the largest single module till date of any commercial direct reduction technology in the world. The contract for this new Midrex Plant was signed on 30 March 2011.

The project will be known as the Naveen Ultra Mega Mod DRI and will feature the latest Midrex Shaft Furnace innovations and will have the flexibility to produce both quality hot DRI and hot briquetted iron for use in a new proposed greenfield meltshop. Iron ore and iron pellets will be supplied from Jindal Steel’s El Mutun Iron Ore Reserves in Bolivia, where Jindal Bolivia is also installing a pellet plant and a steel making facility.

The Naveen Ultra Mega Mod plant can produce up to 2.70 million metric ton per year of DRI.

JSPL had secured the development rights of El Mutun mines, one of the world’s single biggest iron-ore deposits with reserves of more than 40 billion tonne, in 2007. The 40-year contract that gave the company the right to mine about half of the reserves of iron ore also includes setting up an integrated 1.7 MTPA steel plant, a 6 MTPA sponge iron and 10 MTPA iron ore pellet plant in Bolivia. The company will also coming up with a 450 MW power plant. The entire team from JSPL is present at the site and work is at the advanced stage at the site.

Shares of JSPL were trading at around Rs631.15 on the Bombay Stock Exchange in the late afternoon, 1.89% up from the previous close.

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