West Coast Paper Mills is all set to buy International Paper's India unit with the deal set to be completed by the end of the year. The company will acquire shares of International Paper at Rs 275 per share. Rajendra Jain, the executive director and CFO of West Coast Paper shares his views on the deal and the combined entity's outlook.
“Yesterday, we signed the share purchase agreement with the International Paper and in that we will be acquiring 51 percent minimum and maximum 60 percent share at Rs 275 per share. We will be going for a public open offer. This is based on the negotiated price, which we have worked out on various parameters,” he said.
“It is an old plant, demand slowdown doesn’t look to be a case,” he added.
Also Read: West Coast Paper Mills shares rally 13% on decision to acquire stake in International Paper
“Small machines are there. Going forward, we may have to make a big investment in that. In the West Coast plant, we have made an investment of Rs 1,500 crore for putting up a new machine. So all those things we have factorised,” said Jain.
On labour issues, he said: “International Paper plant — as per the information from the public domain — is running very efficiently and there is no issue in that.”
Speaking about financials, Jain said, “There is nothing wrong in the financials, everything is okay. The plant is old and we need to invest a lot of money. Small machines are there, which produces hardly 15-20 tonne per day — for all those we have to go for a huge investment.”