Swedish home appliances major AB Electrolux has said it has no plans to shut down its three production units in India, but there is speculation that Electrolux Kelvinator Ltd (EKL) could face either closure of production facilities or a leveraged buy-out.
"AB Electrolux has no plan to close the three factories in India. Electrolux Kelvinator is undergoing restructuring and we are exploring several strategic options," Anders Edholm, vice-president of Communications, AB Electrolux, said. Mr. Edholm, however, declined to divulge what the options could be.
He also emphasized that there were no plans to substitute production in India with imports from manufacturing bases located in neighboring countries. Meanwhile, analysts pointed out that it is important to note that a leveraged buy-out by the management need not entail closing down of production facilities.
The speculation on EKL's future comes at a time when its losses have come down substantially over the past year. "A company subject to restructuring is under constant review in terms of restructuring efforts, strategic options, etc. EKL results have improved recently, which is encouraging," Mr. Edholm said.
Meanwhile, some pointed to the possibility of a management buy-out by existing shareholders in the company with the front-runner being the managing director of Maharaja Appliances, Harish Kumar, who has an upwards of 4-percent stake in EKL. (Sify Finance)
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