HNG: acquisitions

Hindusthan National Glass (HNG) is said to be in advanced talks to acquire two companies in Eastern Europe, Southeast Asia and MENA (Middle East and North Africa) regions. The company will pay from IN…

Hindusthan National Glass (HNG) is said to be in advanced talks to acquire two companies in Eastern Europe, Southeast Asia and MENA (Middle East and North Africa) regions. The company will pay from INR 500 crore and INR 600 crore for these acquisitions. We have identified three areas for investment in global container glass manufacturing. The investment would entail around INR 200-500 crore per company, but the total outflow would depend on what amount of debt we take on the book, said Mukul Somany, vice-chairman and managing director. Funds for the acquisitions will come from various options. HNG is thinking about encashing about 17% of its treasury stock – created in 2002, when it merged with the Indian operations of Owens Brockway – retrieving about INR 400-500 crore. It also has a strong balance sheet, with a debt equity ratio of only 0.35:1, enabling it to raise debt comfortably. Its current cash pile is presently about INR 90 crore. HNG is said to be conducting due diligence on these deals and an announcement is expected in the next three-four weeks. With regards to the domestic front, the company has lined up a capex (Capital Expenditure) of INR 2,500 crore in the next three years.