Berger Paints India Ltd to sell part of the business for Rs. 90 crores
Berger Paints India had entered into a non-binding understanding for transfer of its paint division relating to 4 wheeler passenger cars and SUV, 3 wheeler and related ancillaries to BNB Coatings India Private Limited (BNB). BNB is a joint venture company where Nippon Paint Automotive Coatings Co., Limited, Japan (NPAU) and the company, where NPAU holds 51% and the company holds 49% of the paid-up capital. BNB is currently engaged in the business of coatings for plastic substrate of automobiles. According to Equity Bulls, “The company has now entered into a business transfer agreement with BNB Coatings for transfer of the business for an agreed consideration, subject to fulfilment of conditions precedent.” BNB is said to have entered into a similar agreement with Nippon Paint (India) Private Limited for transfer of NPI's 4 wheeler passenger car body paint business. Upon consummation of the transactions, BNB will carry out 4 wheeler passenger car body paint business and 3 wheeler automotive coatings business in addition to the plastic substrates coating business. Berger Paints India Limited will continue to carry on 2 wheeler, commercial vehicles and related ancillaries coatings business. The turnover of the business which is to be transferred is about Rs. 29 crores (about 0.85% of the total turnover of the company). The Business will be transferred on a slump sale basis at a consideration of Rs. 90 crores, payable in cash, within a period of 180 days from the date of the agreement. The buyers do not belong to the promoter group. BNB may be deemed to be a related party as the company owns 49% of the paid up share capital and the transaction has been done at an arm's length basis. Shares of Berger Paints India Ltd. was last trading in BSE at Rs.263.35 as compared to the previous close of Rs. 262.65. The total number of shares traded during the day was 9626 in over 384 trades. The stock hit an intraday high of Rs. 265 and intraday low of 261.55. The net turnover during the day was Rs. 2538568.
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