Ess Dee buys 90% stake in India Foils for Rs 120 crore

MUMBAI:ESS DEE Aluminium has taken over the Kolkata-based aluminium foils maker India Foils from the Vedanta group, controlled by Anil Agarwal. The Board for Industrial and Financial Reconstruction (BIFR), the agency monitoring the revival of the ailing India Foils, has sanctioned Ess Dee’s acquisition proposal. Ess Dee will formally take over India Foils on Wednesday, it is learnt. A banker close to the development said the main feature of the BIFR-sanctioned deal is that Ess Dee would pay Rs 120 crore for acquiring 90% stake in India Foils. Of this, it would acquire a 45% stake through subscription of fresh shares, while the other 45% would be by way of direct purchase of Malco’s equity. Vedanta group entity Malco is the promoter of India Foils. As part of the transaction, Malco has agreed to clear India Foils’ Rs 240-crore dues to banks and financial institutions. Ess Dee had expressed interest in acquiring India Foils in February (ET had reported the development in its edition on February 18). Subsequently, all the parties — Ess Dee, Malco and India Foils — had approached the BIFR seeking its permission. The banker said there would be no open offer. Under the acquisition plan, BIFR has sanctioned 90% reduction of India Foils’ equity from the existing Rs 30 crore. Ess Dee Aluminium’s CMD Sudip Dutta could not be reached for comments. Post-acquisition, India Foils will become a debt-free company. India Foils has fixed assets of Rs 400 crore and sales of Rs 250 crore. The company’s accumulated loss is Rs 300 crore. ICICI Bank is the operating agency for implementation of its rehabilitation. Enam was the advisor to Ess Dee, while KPMG advised Malco. The Vedanta group took over IFL from the Kolkata-based BM Khaitan family around eight years ago, but failed to revive the company. Vedanta had put the company on the block a couple of years ago after finding it as a non-core operation. The acquisition of IFL will consolidate Ess Dee’s position in the domestic aluminium foils market with a combined capacity of 38,000 tonne a year (including IFL’s annual capacity of 20,000 tonne). ---economictimes.indiatimes.com