China’s top television maker TCL Electronics is in talks with several Indian companies to sell a 51% stake in its display manufacturing plant in the country, seeking $600-800 million (₹5,708-₹7,611 crore) for the divestment, said four senior industry executives.
Standard Chartered, which is advising TCL on the deal, is in discussions with Dixon Technologies, Epack Durable, Syrma SGS Technology, Amber Enterprises, and Uno Minda, the executives said, noting the talks are at an early stage. Havells was approached but the company is not keen on investing in display backward integration.
TCL’s plant in Tirupati, Andhra Pradesh is India’s only open-cell manufacturing unit, producing the most critical component used in displays such as TVs, smartphones, laptops, tablets, and automotive screens. The facility is owned and operated by the local arm of TCL Corp’s global subsidiary, TCL China Star Optoelectronics Technology (TCL CSOT). TCL is looking to add two local partners in its Indian entity, with the company retaining a 49% stake and remaining the largest shareholder, the executives said.
The company is seeking to structure the deal on the lines of fellow Chinese electronics maker Haier, which recently divested 49% in its Indian arm to Bharti Enterprises and Warburg Pincus. Haier retained 49%, with the remaining 2% held by its India management team.
Emails sent to TCL, Standard Chartered, Dixon, Epack, Amber, Syrma SGS Technology, and Uno Minda remained unanswered.
Co said to be scouting for 2 buyers and eyeing up to $800 m; wants to remain largest shareholder
“TCL wants two buyers for the 51% stake-one could be a strategic partner and another a financial investor,” said one of the executives involved in the negotiations. “Just like Haier India did. Discussions are at an early stage and could be finalised in the next two to three months.”
The company has invested more than ₹1,800 crore in the TCL CSOT plant in the first phase. The facility is part of a larger TCL industrial park, where the company also operates a TV assembly unit which is excluded from the proposed transaction.
The TCL CSOT panel module factory produces screens for TVs and mobile phones, with a designed annual capacity of 8 million TV panels and 30 million mobile phone displays. This is TCL CSOT’s largest plant outside China and India’s first full-process LCD panel module factory with bonding and assembly capabilities. TCL CSOT generates annual revenue of around ₹1,500 crore, the executives said.
Dixon is already setting up a display plant with Chinese firm HKC Overseas, where it holds a 74% stake in the joint venture, expected to become operational this quarter. An executive said Dixon may not be a frontrunner for TCL stake as it would need HKC’s nod for further investment in same domain.
The executives said TCL is under government pressure to dilute stake in display plant, critical to India’s localisation strategy for electronic components. “Like Haier, TCL is looking to pare its stake in the TV display business to de-risk its India operations,” a second executive said.
Source: Economic Times