Kiri Dyes buys German DyStar; may raise Rs400 crore through equity, debt

After buying Germany-based DyStar for €50 million, Kiri Dyes and Chemicals may raise about Rs400 crore through equity and debt for expansion and launching new products

Dyes and intermediates manufacturer Kiri Dyes and Chemicals Ltd may raise about Rs400 crore equally through equity and debt, said a top official. The Ahmedabad-based company may use the funds for expansion of its intermediaries as well as adding a new dye to its portfolio.

“We are planning to raise about Rs200 crore through equity but we have still not finalised the plan and the route of raising the fund. We can look at any route for raising funds like qualified institutional placement (QIP), preferential allotment or global depository receipts (GDRs),” said Chetan Vora,  corporate advisor, Kiri Dyes and Chemicals.

Out of the total Rs400 crore fund which the company plans to raise in the near future, it would use Rs150 crore for expanding its existing intermediaries, vinyl sulphone dyes and high exhaust dyes. It plans to spend Rs200 crore on launching a new dye Levafix while the balance Rs50 crore would be used for capital expenditure (capex).

The company which last month decided to buy Germany-based DyStar said it had completed the deal through a special purpose vehicle (SPV) and with support from its Chinese joint venture partner Longsheng Group. Longsheng Group holds 20% stake in the SPV, Kiri Holding Singapore Pvt Ltd while Kiri Dyes holds the balance.

Last month Kiri Dyes and Chemicals bought DyStar in Germany by paying €50 million. The deal includes DyStar’s patents, IP rights, brand names, trademarks and subsidiaries in 22 countries across the world.

Kiri Dyes and Chemicals said that it plans to turn around DyStar by replacing its high-cost German manufacturing base with low-cost manufacturing in India and China. It expects that DyStar will be cash surplus from 2010 and will start generating a net profit from 2011. Kiri Dyes and Chemicals and its associate Lonsen Kiri Chemical Industries Ltd will benefit by transferring production of reactive dyes, acid dyes and direct dyes from Germany to India.

“Our major restructuring is transferring (the) product base and technology into the existing business. We are also looking at putting up a new plant in Baroda for manufacturing Levafix. It will take almost a year to put up the plant,” said Manish Kiri, managing director, Kiri Dyes and Chemicals.

The company is planning to reduce the cost of production by shifting the headquarters from Germany to Singapore. At present, in Germany, it costs €1.70 per kg to €3 per kg and by shifting the headquarters to Singapore, cost of production would come down to €0.25 euro per kg. 

“Kiri’s immediate focus is to take DyStar to the 2008 level, when it was a €800 million company. Due to insolvency, it has came down to €650 million, we would try and take it back to the same level and then try to turn around the company to €1 billion,” said Mr Vora.

Kiri Dyes and Chemicals was advised by SBI Capital Markets Ltd and its German counterpart Angermann M&A International GmbH in this acquisition. SBI Caps was also the exclusive arranger for the acquisition financing required for the deal. The company secured debt financing from a consortium of banks led by State Bank of India, Export Import Bank of India, Oriental Bank of Commerce and Central Bank of India.


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    Pepsi: Bland, bland, bland

    Something is seriously going wrong with the Pepsi camp; they seem to have totally lost their earlier spark

    With the hot, hot summer on, one was looking forward to some cool, cool cola wars on the tube. And after Coke fired the first salvo with the superb bus commercial featuring film actors Imran Khan and Kalki Koechlin (discussed earlier in this space), Pepsi’s response was eagerly awaited.
    Well, they have replied. And not only have they blinked, they have gone bland too—Pepsi’s summer commercial sucks, big-time. 'Youngistan Ka Wow' is the new tagline for Pepsi. Guess Youngistan is not enough anymore for the restless Gen X, their dil maange a lot more. They want ‘wow’ as well. So that’s cool. The commercial features actor Ranbir Kapoor, who plays the role of a smart-alec butler. He has been ordered to serve Pepsi to the president of a nation (wow, didn’t know presidents of nations sip Pepsi… unless of course in combo with a large peg of rum). Now the thirsty butler deliberately plays around with the Pepsi bottle, to arouse suspicion. And the ploy works. The Nazi-like security dudes, watching him on CCTV, get angsty, and fall for the trick. (Conveniently forgetting that the days of poisoning heads of states ended with Caesar & Cleopatra… these days assassins simply trot in with guns and grenades). Anyways, they order Butler Kapoor to take a sip first. And yes, the actor gulps down the whole bottle, as you can predict. And no, he doesn’t blow up. Thank you very much.
    An extremely witless, silly and dull commercial. It’s neither smart nor funny nor cool. The new ‘wow’ factor hasn’t been utilised at all, and even their old ‘Youngistan’ idea dies at the hands of a very juvenile advert. Something is seriously going wrong with the Pepsi camp; they seem to have totally lost their earlier spark. It’s been years since they came up with the fabulous ‘Nothing official about it’ idea, and since then Pepsi has been releasing one disastrous commercial after another. Thus leaving the field wide open for Coke to have a free run. Wonder what the problem is. I know it’s not polite to state this, but if the current team has lost the fizz and has gotten into a serious creative rut, then it’s a case of appointing a new brand manager and a new ad agency. Pepsi is too funky a brand to be left at the hands of mediocre thinkers.
    Anyways, the bad news for us viewers is that there shan’t be any cola wars. Even the detergent wars got killed by the courts. So not much fun in watching ads this season. But then, the IPL is back, and with that the hysterical Vodafone Zoozoos. So all’s not lost!   

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    1 decade ago

    Can i buy a hard copy of this story?

    Air traffic grows considerably in the last couple of months

    The hike in passenger traffic is likely to have a positive impact on the financial health of air carriers, most of which have been reeling under heavy losses for the past two years

    Air traffic in the first two months of this year showed a major growth of 19.2% compared with the same period last year, a development that could bring some relief to the loss-making Indian aviation industry, reports PTI.

    The total passengers carried in January and February this year was 80.56 lakh as against 67.61 lakh in the first quarter of last year, official figures released on Monday showed.

    The hike in passenger traffic is likely to have a positive impact on the financial health of the air carriers, most of which have been reeling under heavy losses for the past two years.

    Like previous months, Jet Airways and its subsidiary JetLite together led the way in flying most passengers—10.28 lakh in January and 10.08 lakh in February, followed by Kingfisher and its low-cost subsidiary Kingfisher Red with 9.08 lakh and 8.77 lakh and Air India (Domestic) with 7.34 lakh and 6.63 lakh.

    They were closely followed by no-frills carrier IndiGo that carried 6.25 lakh and 5.77 lakh in the first two months of this year, followed by SpiceJet with 5 lakh and 4.65 lakh and GoAir with 2.2 lakh and 2.11 lakh. Full-business class airline Paramount carried 72,000 and 62,000 passengers respectively, the figures showed.

    Jet and JetLite jointly bagged over one-fourth of the market share in the two months, carrying 25.2% and 26.3% of the total passengers during the period.

    Kingfisher and its subsidiary flew 22.2% and 22.7% followed by Air India (Domestic)—18.0% and 17.2%—while Paramount flew 1.8% and 1.6% of the total passengers.

    IndiGo led the low-cost airlines by flying 15.2% and 14.9% in January and February this year followed by SpiceJet with 12.2% and 12% and GoAir with 5.4% and 5.5%.

    The figures relating to average seats per kilometre and revenue per km showed that an increasing trend in both capacity and demand for air travel continued in February this year as well.

    The overall cancellation rate of scheduled domestic airlines for February this year was 1.5%, while the overall On-Time Performance (OTP) of scheduled domestic airlines was recorded at 79.4%.

    The directorate general of civil aviation (DGCA) has already directed all the 70 foreign carriers to file reports about their on-time performance on a monthly basis. Of them, only 47 have filed the reports so far. The on-time performance of these foreign airlines has been 73.7% for departures and 73.6% in arrivals.

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    Shadi Katyal

    1 decade ago

    It is heartening to hear that air traffic in India has picked up.
    GOI is asking foreign carriers for reports but we didnot see any facts and figures of Air India.Does air India being a PSU doesn't have to comply with any rules.
    Let the nation know that how poorly it is being managed and run.
    foreign airlines carry about 70-80% of Indian passengers and presume only 20-25% are carried by well subsidies and well uninionised every loosing national airline.
    Let the nation know the facts and figures so tax payer can take some action instead of throwing money year after year.

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