Polycab India to acquire 50% stake in Ryker Base
PIL had entered into 50:50 JV with Trafigura in 2016 to incorporate Ryker
Polycab India (PIL) has signed an agreement with Trafigura to acquire 50% stake in Ryker Base (Ryker), thereby terminating the existing joint venture (JV).
PIL had entered into 50:50 JV with Trafigura in 2016 to incorporate Ryker with an aim to strengthen backward integration of its operations and improve quality of its key input i.e. copper.
The purchase consideration is likely to be around $4 million (Rs 300 million). As of 31 March 2020, Ryker had Rs 1.97 billion of external commercial borrowing availed earlier for funding the cost of the plant which will now be fully consolidated in PIL.
The transaction is subject to fulfilment of certain conditions by both parties. Copper is an important element of Polycab’s business and used extensively in wires, cables as well as most of FMEG products.
Ryker is involved in manufacturing copper wire rods with a total annual capacity of 2,25,000 tonne. It commenced its commercial production in FY20.
The facility uses state-of-the-art technology to consistently outperform global quality benchmarks, consumes less energy and is significantly lower on carbon emissions. The transaction will further allow PIL to have complete control of Ryker’s manufacturing operations.