Private equity major Actis is looking to hive off and possibly pick a stake in the general lighting business of Halonix (formerly Phoenix Lamps). Actis already owns 66% in Halonix (since 2007) in one of the rare control deals in the Indian private equity space.
JM Trivedi, South Asia Head of Actis, told VCCircle: "This is a value unlocking move (for all the shareholders). Halonix board decided on subsidiarization of the general lighting and branded unit, which will only enhance the value of the automotive lighting business. While automotive lighting is mature and profitable, the general lighting is young, growing and not so profitable."
As per an organisation restructuring, it is hiving off the non-automotive lighting business into a wholly owned subsidiary Halonix Technologies. In a disclosure to the Bombay Stock Exchange, it said, "the board also noted an expression of interest received from Argon India Ltd and Argon South Asia Ltd with respect to the non-automotive business of the company."
Argon India and Argon South Asia are investment entities of Actis, which has the requiste regulatory approvals in place. VCCircle, in February this year, was the first to report on the possible restructuring at Halonix.
Halonix has two set of business lines: general lighting dealing with products such as compact fluorescent lamps and the automotive halogen lamps business. For the year ended March’09, the company derived as much as 58% of its Rs 400-crore revenue from non-automotive lamps which is now proposed to be hived off into the wholly-owned subsidiary.
Halonix is in the business of making halogen lamps for automobiles including two & three-wheelers, passenger cars, commercial vehicles & off-road applications. It is also in the business of branded general lighting, mostly compact flurocent lamps (CFL), which consume one-fourth of the energy as the normal bulbs and have a longer life. Sources said the CFL business of Halonix is currently making losses and hence the company's move to hive it off.
Going forward, one possible option could be monetise the two business lines by listing them as two separate firms to be eventually sold off to specialised lighting companies.
Actis had last year roped in Wipro Lighting veteran Rajesh Kochhar as its new managing director.