Rallis India, the agrichemicals arm of the Tata group, has approved the sale of its corporate headquarters-Rallis House to the group $1 billion software powerhouse Tata Consultancy Servcies for Rs 56 crore (Rs 560 million).
The Rallis board on Wednesday approved the sale, sources familiar with the development said. The sale price was marginally higher than the reserve price of Rs 55 crore (Rs 550 million).
This is the second deal between Rallis and TCS. Around two years back, Rallis had sold some property in Mumbai to the software major for around Rs 133 crore (Rs 1.33 billion). It had also sold its pharma business to Shreya Life Sciences for around Rs 49 crore (Rs 490 million).
Rallis India had been saddled with high cost debt, which had caused it to slide into the red. The company reported a pre-tax loss of Rs 81 crore (Rs 810 million) on a turnover of around Rs 885 crore (Rs 8.85 billion) during the year ended-March 31, 2003. The company utilsed the earlier sale proceeds of Rs 182 crore (Rs 1.82 billion) to retire this high cost debt.
The decision to sell the corporate headquarters-prime property in South Mumbai-has come even as the company is making efforts to turnaround. The company has also witnessed a change of guard in the last few month. In April 1 this year, F A Mehta the long time chairman of the company stepped down.He was succeeded by R Gopalakrishnan, a director on the board of holding company, Tata Sons. Further, Rajeev Dubey, managing director resigned citing personal reasons. He was succeeded by V S Sohoni, who had joined the Rallis board in March this year.