US co gets okay to buy 25% in its India unit

New Delhi: The Foreign Investment Promotion Board (FIPB) has overruled objections from the department of industrial policy & promotion (DIPP) to allow US-based Kerns Manufacturing to pick up 25% stake in its Indian arm in lieu of high-value machinery as well as technical know-how and training key personnel.
The Indian venture of Kerns is being set up for manufacture of aircraft and spacecraft spares. DIPP had argued that Kerns should not be allowed to pick up stake in the Indian venture without actual infusion of funds. The Indian arm is supposed to issue equity stake in lieu of technical know-how, training and machinery.
FIPB decided that such approvals could be provided on a case-to-basis and cleared the Kerns proposal. The proposed paid-up equity of Kerns Aeroproducts is Rs 2.3 crore, consisting of 23 lakh shares out of which 25% (5.75 lakh shares) would be allotted to the foreign collaborator, Kerns Manufacturing.
The remaining 75% equity will be held by the Indian promoters of Kerns Aeroproducts, 40% by the Shivkumar Reddy Group (engaged in the distilleries business) and 35% by Babu Group (engaged in mechanical engineering and fabrication), jointly called as SBG.
14/03/07 Sunny Verma & G Ganapathy Subramaniam/Economic Times

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Categories: Foreign Mar 2007, General Aviation Mar 2007