Swiss Textile Machinery Major Rieter Has Made a Complete Exit From Lakshmi Machine Works

Swiss textile machinery major Rieter has made a complete exit from city-based Lakshmi Machine Works (LMW). Rieter has sold its residual 3.48% stake in LMW on Tuesday. LMW had bought out the 50% stake held by Rieter in their joint venture Rieter-LMW Machinery in April 2011. The stake sale brings to an end a long association between the two companies that started in 1965. The Swiss firm provided technology for making textile machines and got about 13% stake in LMW in return. Rieter wanted to go it alone in the Indian market but its 13% stake in LMW became a major hurdle for its ambitions. LMW had invoked Press Note 1 in 2005 to stopRieter from commencing manufacturing operations in India. Rieterplanned to sell textile machinery through Suessen India, a 100% subsidiary. Press Note 1 (earlier Press Note 18) restricted foreign companies with more than 3% equity in an Indian company from setting up another unit in the same line of activity through the automatic route. Rieter sold about 11 lakh shares in LMW during the share buy-back programme that closed in 2011. This accounted for over 99% of the shares bought back by LMW and brought downRieter's stake in the company to around 4.5%. The Swiss major sold its entire 391520 shares in LMW at an average price of Rs. 2002.59 per share on Tuesday, data on bulk deals with the NSE showed. Rieter has pocketed around 78.4 crore from the stake sale. Source: India Times