ITALIAN COMPANY BUYS RAVIN CABLES FOR RS 200 CR

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Prysmian, an Italian cable manufacturer, has agreed to buy a 51% stake in Pune-based cable maker Ravin Cables for Rs 200 crore in a move which will enable the € 8-billion company enter the $3-billion Indian market.

Ravin, which sells low and medium voltage cables to customers in India, Africa and the Middle East is thus valued at Rs 400 crore, 1.3 times its top line of Rs 310 crore. Last year, Ravin’s earnings before interest depreciation and tax or EBIDTA was Rs 36 crore. The numbers for top line and EBIDTA are for the last fiscal, 2008-09, as more recent recent data is not available for this unlisted company.

The Milan-based company will subscribe to fresh shares of Ravin and will also buy some equity from existing shareholders.

Prysmian, which has operations in 38 countries and workforce of 12,000, will invest around Rs 100 crore in Ravin by buying new shares. “This money along with the foreign company’s technological know-how will help Ravin to diversify into speciality cables,” said Ravin CMD Vijay Karia.

Mr Karia, who along with his family currents owns 72% in Ravin will control 49% of the company’s expanded equity capital post the deal, and will remain chairman of the company. Prysmian will have the right to nominate the majority of the board members once the deal is completed.

"We are very pleased to have found a wellreputed, well-managed and competitive partner in India who is also present in the Middle East,” said Prysmian CEO Valerio Battista, who came to Mumbai to sign the deal.

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