Rajkot co takes a big leap, plans European buyout

Rajkot: Jyoti CNC, a Rs 120-crore Rajkot-based company, is all set to take over a high-precision machine tools manufacturer in Europe, catering mainly to the European aviation industry. The Rs 200-crore deal likely to be struck around June 15 will see an Indian brand soaring high with international airlines.
The CNC major will fund the acquisition through its internal accruals and will also go in for private equity.The domestic aviation market is attractive particularly for the Indian machine tool companies following a recent provision which makes it mandatory for a foreign supplier to source at least 30% of spares domestically. The acquisition, thus, is strategic for the Rajkot company. The European deal will propel Jyoti into high-end components segment in the country’s aviation sector.
The name of the target company was not disclosed. However, sources said that the European company is more than 100 years old, and that as per the norms in the European countries a promoter has to retire after an age of 70. The norms have compelled many companies there to look out for potential buyers.
The Rajkot company produces CNC (computer numeric control) machines under Jyoti brand and is a leader in India.
26/05/07 Tapash Talukdar & Harit Mehta/Economic Times

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Categories: General Aviation May 2007, New May 2007