Carrier Aircon's failing financial health prompts open offer

NEW DELHI, JULY 15. Concerned by over 50 per cent fall in net profit of Carrier Aircon and mounting competition in air- conditioning market, Carrier Mauritius has launched an open offer for acquiring 49 per cent stake in the Indian company at Rs. 100 per share.

The offer is open from July 2 to 31. The adverse financial position of Carrier Aircon and consequent need to pump in money, technological expertise were cited as reasons for the Mauritius based company to jump in the fray. In case the acquirers succeed in mopping up 49 per cent equity, Carrier Aircon will become a closely held company and cease to be listed on Indian bourses.

At present, while Carrier Aircon's 28.7 per cent equity is held by NRIs/overseas corporate bodies/resident individuals, the remaining 20 per cent equity rests with the public."The last several years have witnessed entry of major international brands of air conditioning systems in Indian market. This has also impacted Carrier Aircon's financial performance," Carrier Mauritius says in the offer letter laying down object of the offer and future plans.

For the 12 months ended December, 2000, Carrier Aircon posted 52 per cent lower net profit at Rs. 9.16 crores against Rs. 29.04 crores in the previous year. Sales turnover also fell by over four per cent to Rs. 385.16 crores.

The acquirers and persons acting in concert believe that in order to maintain competitive edge in this dynamic market place and for Carrier Aircon to maintain its market position, it requires greater commitment from the parent in terms of financial resources, technology and new products.

"Carrier Corp intends to achieve this by making the monetary and technical inputs available to Carrier Aircon. In order to justify a greater commitment of resources to meet the competitive market challenges and to provide an opportunity to the public shareholders of Carrier Aircon to make appropriate choice under the prevailing circumstances, the acquirer has decided to make this offer," the offer letter says.

The acquirer, Carrier International Mauritius Limited, is aided by persons acting in concert namely Carrier Corporation and Carrier Singapore. The offer is worth Rs. 114.77 crores.

Justifying the offer price of Rs.100 per share, Carrier Mauritius has cited the average price calculated during the 26 weeks preceding the date of the public announcement as Rs. 85.76.

- PTI

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