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Berger International Limited Exits Operations in Malta

Published on 2004-05-13. Author : SpecialChem

Mumbai, May 13, 2004: In an announcement made today at the Singapore stock exchange, Berger International Limited (BIL), the overseas subsidiary of Asian Paints, announced it would divest its stake in its subsidiary Berger Paints (Malta) Limited (BPM). BIL has announced that it would sell its 84.2 per cent equity stake in BPM to local partners. An agreement to this effect has been signed between BIL and Van Gee Bee Limited & its associates. Van Gee Bee ltd, the local shareholder held the balance 15.8 per cent stake in the company. Berger International Limited would receive a consideration of around S $ 1.8 million (around INR 47 million) for the sale of its stake in Berger Paints (Malta) Limited. Berger International limited is listed on the Singapore stock exchange. It has no operations in India. Asian Paints, Asia's fourth largest paint company has controlling stake in BIL, which now has manufacturing facilities in 10 countries and sells its products in over 35 countries in the world.

"Berger International limited has strong presence in the Caribbean, Middle-East and South East Asian region. Our operations in Malta has no strategic fit, as it is our only subsidiary in Europe and its contribution to group's sales is not significant. Further the paint market in Malta is small and has not been growing in the past few years. It has also been taking up disproportionate management time for its size. It is for these reasons that the group has decided to sell its stake in the venture". said Mr. Jalaj Dani, Chairman, Berger International Limited. He further added "Berger International Limited will continue its focus on emerging markets to drive sales growth for the group."

Berger International Limited operates primarily in three regions through the following countries.

Caribbean region : Jamaica, Barbados and Trinidad & Tobago

Middle East region: United Arab Emirates & Bahrain

South East Asia : Singapore, Thailand, Malaysia, China & Myanmar

Europe : Malta

From the above, it is evident that in Europe, BIL operates only in Malta and thus there is no geographical and marketing contiguity for the group.

The investment in BPM by Berger International Limited for its 84.2 % stake is S $ 1.51 million (around INR 40.5 million) in FY 2003, as recorded in its annual accounts. As a result of this transaction Berger Paints (Malta) Limited will cease to be a subsidiary of BIL. The net tangible asset value of BPM as per its audited financial statements as on Dec 31, 2003 was approximately S $ 1.74 million (around INR 46.6 million). The said transaction is not expected to have any material impact on the earnings per share of BIL. BIL would enter into a new technical service and trademark licensing agreement with BPM. BIL would continue to receive royalties for services provided and use the trademark.

Berger Malta - Financials

With a population of less than 400,000 and the paint market valued at around S $ 14 million, Malta does not hold lot of promise for Berger International Limited. The unit in Malta contributed around 2 per cent to group's sales in FY 2003. Net Paint sales in FY 2003 for the Malta subsidiary was S $ 2.05 million as compared to S $ 1.81 million in FY 2002. Loss from operations was S $ 0.5 million in FY 2003 as compared to a loss of S $ 0.32 million in FY 2002.

About Berger International Limited

With revenues of S $ 117 million and listed on the Singapore stock exchange, Berger International Limited operates in 10 countries across the world. These countries are spread across three regions namely the Caribbean, Middle East and South East Asian region are Singapore, Malaysia, Thailand, Myanmar, China, Bahrain, UAE, Jamaica, Trinidad and Barbados. In all these countries, it has its own manufacturing facilities to service the local consumer as well as exports to neighboring countries. BIL was incorporated on 3 December 1993 as a private limited company and subsequently converted into a public company in 1994. In November 2002, Asian Paints, Asia's fourth largest paint company acquired controlling stake in Berger International Limited.

Source: Asian Paints


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