ITC plans to pick up stakes in US-based IT firmJuly 30th, 2008 - 7:40 pm ICT by IANS
Kolkata, July 30 (IANS) Tobacco-to-paper giant ITC Ltd plans to acquire a US-based Information Technology firm, said a top company official here Wednesday. “We are talking to a US company and hope the deal will be sealed soon,” said Y.C. Deveshwar, company chairman, on the sidelines of the annual general meeting of the company.
He refused to discuss further details before the deal materialises. Regarding investment for the acquisition, he said it would be modest.
ITC already has a wholly owned IT subsidiary called ITC Infotech India Ltd, which has clients in sectors like financial services, retail, engineering, hospitality and media.
On the growth plan of the company in the current fiscal, Deveshwar said: “We are aggressively wanting to grow.”
“We hope in the next few years all the cash surpluses, which we have got that gets used up. Our plans are aggressive enough to absorb all these cash into the future of the company,” he added.
The profit after tax of the company during the last fiscal stood at Rs.31.20 billion.
ITC plans to set up greenfield paper project either in Madhya Pradesh or in Andhra Pradesh, for which talks are progressing, he said.
Deveshwar added that the project execution depends a lot on getting land, clearances from the pollution control board and various other agencies and it is usually time consuming.
Regarding the tobacco business of the company, which fetches maximum revenue for it, he said: “It’s a legal business that we are in. We require this business for building new businesses of the future.”
On the company’s new fast moving consumer goods businesses like snack foods and lifestyle retailing, Deveshwar said they will take some time to turn around.
“Return on new businesses will take time to start coming. We have invested with a long term view in mind,” Deveshwar told shareholders.
ITC’s FMCG business, excluding cigarettes, suffered a loss of Rs.2.63 billion in 2007-08.
We would continue to invest in competing companies by picking up minor stakes in them, Deveshwar said.
ITC had earlier picked up 14.92 percent stake in East India Hotels that competes with its hotel arm.
“We will continue to invest in companies that have similar business profile like that of ours,” Deveshwar told reporters.
On the strategic nature of investments, he said they would constitute minority stakes.
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