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Onida promoters end battle

April 19, 2008 11:51 IST

Corporate India has just seen the end of yet another sibling rivalry. Mirc Electronics Chairman Gulu Mirchandani is buying out his dissenting brother Sonu Mirchandani from Guvisco, the holding firm.

According to a late evening filing with the National Stock Exchange, Gulu will buy the 33.3 per cent stake held by Sonu's wife for about Rs 110 crore (Rs 1.1 billion). The proposed deal will increase Gulu's stake in the holding entity from 27.77 per cent to 61.07 per cent.

Guvisco owns a 52.74 per cent stake in Mirc, which manufactures the Onida brand of consumer goods. Onida has a share of 8-10 per cent in the Rs 14,000-crore (Rs 140-billion) colour television market, which is growing at 10 per cent every year.

Gulu, who was unavailable for comment, proposes to acquire about 60,000 shares of Guvisco at Rs 18,482 per share.

The Mirchandanis' brother-in-law, Vijay Mansukhani, will retain his 33 per cent stake in Guvisco. Mansukhani was made managing director of the company last year, while Gulu retained the chairman's post.

This caps the months-long dispute between the brothers over Sonu's decision to exit and sell his stake to outsiders. Sonu was reportedly in talks with Videocon Industries and Future Group, amongs others, to sell his stake.

Videocon had shown interest in the deal on condition that the promoters settle their internal differences.

Sources familiar with the developments said the trigger for the dispute was Gulu's decision to put his son Kaval in charge of the company's plasma and LCD business without consulting Sonu.

The Mirc Electronics share closed at Rs 18 on Friday on the Bombay Stock Exchange against Rs 17.65 on Thursday.

Recently, the Rs 1,600 crore (Rs 16 billion) Mirc Electronics entered into a strategic partnership with the US-based communications and consumer silicon solutions provider, Marvell, to introduce the Qdeo video processing technology enabled LCDs in India. Initially the company is targeting 10,000 pieces per month with an eye on 10-15 per cent of the Indian LCD market.

BS Reporter in Mumbai
Source: source