Automotive component maker Varroc Engineering Ltd has bought the 30% stake it didn’t already own in its Romanian unit from its joint venture partner for €1.05 million (Rs 9. 36 crore) in cash.
The acquisition of the stake in Varroc-Elba Electronics S.R.L from Romania’s Elba SA is part of an ongoing group consolidation exercise, the auto-parts maker said in a stock-exchange filing.
Varroc-Elba was incorporated on January 14, 2019. It makes and sells electronic lighting solutions for automotive companies and suppliers.
As on December 31, 2019, the company recorded total losses amounting to about Rs 2.8 crore and had a net current debt of around Rs 4.14 crore.
Varroc Engineering is part of Varroc Group and supplies auto parts to global carmakers and domestic bike makers.
Last month, the Mumbai bench of the National Company Law Tribunal approved the scheme of amalgamation of its subsidiary Varroc Lighting Systems (India) Pvt. Ltd with Varroc Engineering.
The company was previously backed by private equity firm Tata Opportunities Fund. The fund exited Varroc in July 2018 during its public offering.
The Tata PE fund had, in March 2014, invested Rs 300 crore in Varroc to fund the company’s acquisition of the international auto lighting systems business from US-based Visteon.
Varroc, the sixth-largest global exterior automotive lighting manufacturer and one of the top three independent exterior lighting players, is 85% owned by promoter and managing director Tarang Jain and his family.
The company designs, manufactures and supplies exterior lighting systems, plastic and polymer components, electrical and electronic components, and precision metallic components to car, commercial vehicle, two-wheeler, three-wheeler and off-highway vehicle manufacturers.
For the July-September quarter, Varroc Engineering reported a net loss of Rs 40.06 crore as against a net profit of Rs 22.19 crore a year earlier. Its sales rose 7.8% to Rs 2,916 crore from Rs 2,703 crore.