CI OEN to sell automotive connector biz
FCI OEN Connectors has decided to move out of automotive connector business. The board of directors has decided to sell its automotive connector business to FCI Technology Services Ltd, Kochi, which is a 100 per cent subsidiary of FCI Asia Private Ltd, Singapore. The sale will be subject to the shareholders and FIPB approvals.
Based on the valuation of an independent audit firm, the board has fixed the sale consideration at Rs 25.82 crore. It includes the value of all intangibles, fixed assets as well as the net current assets exclusively used for the automotive business, but excluding the factory land, building and its furnishings.
"Though automotive connectors was a booming business several years ago, it has been on the decline in recent times. The downtrend was most visible from the European and US markets, which were the primary focus of the company. In this background, the board has decided to focus on predominantly the telecommunications sector," senior company sources said.
While the automotive connector business constitutes less than five per cent of the total turnover, the company does not have a major presence in the domestic market, the sources added.
In a notice to the BSE, FCI OEN Connectors said that it had been operating the automotive business for over seven years now, and while the business was performing satisfactorily, it remained a very small part of the company today. The company’s growth has been driven by the communications business, which continues to perform strongly.
For the last six months, the communications business has outperformed management expectations, while the automotive business has been moderately affected by some of the headwinds in the global auto industry.
Given recent internal analysis, there now exists an opportunity for FCI OEN to receive business transfers from the communications business of the company abroad, providing the Indian communications business with an opportunity for marked growth in this segment, it said.
The effective date of the sale has been fixed for December 31. The company’s shares closed 2.6 per cent down at Rs 395 on the BSE, lower by Rs 10.
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