Actis-controlled Halonix Ltd is reviving the plans to hive off its loss-making general lighting business, which will make the public-listed firm a focused player in automotive lighting.
In a board meeting last week, the firm formed a sub-committee of directors to consider options regarding the re-structuring of the business and operations. “The options may, inter alia, include the transfer of business of the general lighting division into a subsidiary company with an intention to achieve an eventual objective of sale of the division as an independent operating business,” the company stated in a BSE disclosure.
In July 2010, the firm decided to sell the lighting business to Actis. At that time, it decided to first hive off the general lighting business into a subsidiary, Halonix Technologies, and then sell the shares of the subsidiary to Actis.
However, the deal was scrapped and the company decided to continue with both automotive and general lighting as two separate and distinct lines of business.
The general lighting business, which competes with the likes of Philips, Havells and Osram, among others, constitutes around 60 per cent of the company’s revenues but it is a loss-making business. Therefore, selling it will enable the firm to become a focused automotive lighting company. The auto lighting business is profitable but the company, as a whole, has been clocking losses due to the general lighting unit.
Private equity firm Actis, which struck a number of control deals in India, had acquired a majority stake in the company way back in 2006-07 with a final tranche of 20 per cent stake through an open offer - taking its holding to 66 per cent. The open offer was made at Rs 190 a share.
Shares of Halonix were quoting at Rs 47.2 a unit, up 6.3 per cent in mid-day trades in a strong Mumbai market on Monday.
Halonix manufactures halogen lamps for automobiles, including two & three-wheelers, passenger cars, commercial vehicles and off-road applications. It is also in the business of branded general lighting, mostly compact fluorescent lamps (CFLs).
Last October, Halonix acquired Luxembourg-based International Lamps Holding Company SA for an undisclosed amount.
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