Aug. 30 (Bloomberg) -- Triveni Glass Ltd., an Indian maker of glass products that’s doubled in market value this year, plans to pay off debt and expand capacity of building products with cash it expects to get from selling assets.
“We are in talks with local distributors who would like to enter manufacturing,” Finance Director A.K. Dhawan said in a telephone interview today. “The purpose of the sale is to clear all our liabilities. If there’s money remaining, we’ll invest it in our Andhra Pradesh plant.” The company’s debt is about 1.5 billion rupees ($32 million), Dhawan said. That’s about five times the market value.
India’s expanding economy, which has grown an average 8.5 percent per annum for the past five years, is stoking demand for building materials used in homes, factories and offices. The surge in Triveni’s share price this year compares with a 6.8 percent increase in the Bombay Stock Exchange BSE500 Index.
Triveni Glass plans to spend about 50 million rupees to increase output of glass used in buildings by 25 percent at its facility in eastern Andhra Pradesh state, Dhawan said. The funds may come from cash generated by the sale of plants in Uttar Pradesh, which closed about four years ago because of “labor problems.” The company said in an Aug. 2 stock exchange filing that it would sell the assets.
The shares climbed as much as 5 percent and traded 3.1 percent higher at 18.01 rupees as of 3:05 p.m.
Profit and sales may almost double by March 2013 from the 2010 fiscal year, he said. Sales were 305.6 million rupees in the 12 months through March 2010. Revenue in the first quarter of this year increased 18 percent.
Triveni Glass may next year invest around 200 million rupees to build a new production line to make electricity-generating solar panels at its Raja Mundry plant in eastern Andhra Pradesh state, Dhawan said.
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