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May 21, 2002 | 1225 IST
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Videocon buys 16% stake in Italian JV

S Ravindran & Reeba Zachariah

The Videocon group has bought its Italian joint venture partner's 16 per cent stake in Necchi Compressori for around Rs 350 million.

Necchi is now a wholly-owned subsidiary of the Videocon group. The 16 per cent stake was earlier held by the G Beccaria family of Italy.

"The deal was struck a fortnight ago. We have decided against hiking the capacity of the compressor plant immediately due to the prevailing recession. However, we will rename the company soon," V N Dhoot, chairman of the Videocon group, said. The company is likely to be rechristened Videocon Compressori.

The company has the capacity to produce 5 million compressors annually. Videocon International, the flagship company of the group, had initially acquired a 50 per cent stake in Necchi. Subsequently, it hiked its stake to 84 per cent.

Necchi supplies compressors to Videocon International's subsidiary Applicomp. Interestingly, the Rs 40 billion Videocon group, which until now identified with the consumer durables industry, is shifting focus to the petroleum sector. It has already stated publicly its interest in bidding for the government's stake in Hindustan Petroleum Corporation and Bharat Petroleum Corporation.

The group also plans to list Videocon Petroleum, a company privately floated by the Dhoot brothers, on the New York Stock Exchange through a $200 million offering.

While a 30 per cent stake may be diluted initially, the Dhoots may bring down their stake to about 51 per cent at a later date.

Apart from petroleum, the group has also been looking at a string of other diversifications such as aviation, insurance and telecom. However, plans in these sectors have failed to take off.

The group had expressed interest in acquiring a controlling stake in the beleaguered Dabhol Power Company. However, this plan too failed to take off.

The group has ambitious plans in the entertainment sector as well. It has set up a separate company Videocon Entertainment to handle multiplexes, film studios and production of Hindi films.

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