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Exide to merge Chloride

Exide Industries Limited will seek the permission of its shareholders to merge Chloride International Limited, a subsidiary of Exide Products Limited, into the parent company, EPL. EPL in turn is a subsidiary company of EIL, the mother company of the Rs 98.4 billion batteries and related products manufacturer.

Chloride International, formerly known as Macneill International Limited, was in the business of marketing caplamps and batteries manufactured by Exide Industries. However, it had ceased operations in the financial year ending March 31, 2002.

As a result, its gross income shrank from Rs 57 million in financial year ending March 31, 2001, to just Rs 1 million in fiscal ending March 2002. The company had long been loss making and noting this, the directors decided that the interest of Chloride International lay in merger with its holding company Exide Products.

If the shareholders approve of the merger, the company will seek the statutory permission from the Kolkata High Court for the formal merger. Similarly, Exide Products shareholders will be asked to approve the merger as the process would lead to the emergence of a stronger and more resilient company "to fully exploit available opportunities in the market".

Market analysts see the move as one which would both clean up the Exide balance-sheet and also lead to the emergence of a new entity through which Exide Industries could route new investments or diversify. "The new company would be the platform for future growth in new businesses such as lead smelting, or new generation batteries," they predicted.

The merger of Chloride International would mark the extinction of the Chloride name from the Indian portfolio of Exide.

However, Exide would continue to have some rights over the Chloride name through its 100 per cent subsidiary Chloride Batteries SE Asia Pte Limited of Singapore (CBSEA). The Singapore-based enterprise, acquired by Exide in February 2001, has reported net profit of Singapore $102,615 on revenues of Singapore $16 million in 2002 against sales of Singapore $15 million and loss of Singapore $32,174 in 2001.

CBSEA's immediate holding company is Exide Industries Limited, India, while its intermediate holding company is Chloride Eastern Industries Pte Limited of Singapore and ultimate holding corporation is LIEC Holdings SA incorporated in Switzerland.

Exide Industries also has interests in Associated Battery Manufacturers (Ceylon) Limited, the prominent lead acid battery manufacturer in Sri Lanka. In India, it has another subsidiary, owned 51 per cent, named Caldyne Automatics Limited. Caldyne makes battery chargers, DC distribution boards and related products.

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