Forbes Gokak Ltd. (Mumbai, India) has decided to convert Eurkea Forbes Ltd. into a wholly-owned arm by buying out the 40 stake of Electrolux AB of Sweden.
In a notice to The Stock Exchange, Mumbai, the company said its board of directors has approved the arrangement for purchase of the 40 percent shareholding in Eureka Forbes Ltd. for an amount of Rs 524.2 million (approx. U.S. $11.4 million). While 11.80 lakh shares will be purchased directly by the company for Rs 312.4 million (approx. $6.8 million), the balance of 8 lakh shares will be purchased through its wholly-owned subsidiary, Forbes Finance Ltd., for Rs 211.8 million (approx. $4.6 million).
The company also said that Eureka Forbes Ltd., through its wholly-owned subsidiary Aquamall Water Solutions Ltd., will obtain an assignment of the trade name "Aquaguard" for an amount of Rs 17.04 crore. In addition, Eureka Forbes Ltd. will enter into an agreement with Electrolux Homecare Products Ltd of the U.S. for the use of the name "Eureka" as a part of its corporate name for a period of 5 years, with two additional options of 1 year each, on a payment of U.S. $50,000 per annum. The transaction is subject to requisite approval of the concerned authorities, the notice said.
Eureka Forbes Ltd., a 60:40 joint venture between Forbes Gokak and Electrolux AB, was set up in 1982 to market health and hygiene products in India. It introduced home cleaning systems in 1982, water purification systems in 1984, and air purification systems in 1994.
The company had pioneered the direct sales era in the Indian market-place by sending salesman to domestic doors for selling Aquaguard brand of water-purifiers and Euroclean brand of vacuum cleaners. (The Financial Express)
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