Rabin Ghosh

Mumbai: US-based APW Electronics Groups, which holds 29% stake in enclosure systems manufacturer APW President Systems, is looking at exiting the company.

The Indian promoters, who hold 30% stake in the company, are keen to replace the troubled electronics components manufacturer with another technology partner.

E.A. Elias, managing director, APW President Systems said, “Looking at the current stock price, the Indian promoters don’t have the funds to buy out APW Electronics.We are interested in getting a global technology leader in our space to replace APW Electronics, and not just a financial investor.”

At Friday’s closing price of Rs162 on the BSE, the Indian promoters would require about Rs 40 crore to acquire APW Electronics’ stake.

In 2002, Pewaukee-based APW faced bankruptcy and was acquired by private equity investors. Since then, the current promoters are liquidating their positions in their various investments across the globe. As is with any joint venture deals, the incumbent partner has the first right of refusal for a stake-buy.

APW entered India in the early 90s through a joint venture with President Systems.

Elias said the company has been in talks with most global enclosure systems majors like Emerson, Pentair, Rittal, and APW for possible investment into the company. In the Rs800 crore domestic enclosure systems market, Germany’s Rittal is the market leader.

APW President has a presence only in the electronics enclosure systems, worth about Rs400 crore, with a 25-30% market share.

“We don’t wish to enter the electrical enclosure system market since it is less structured. Moreover, we see a lot of growth in our market with strong demand coming from IT, telecom, general electronic, and contract manufacturers. We are seeing 25-30% growth,” Elias said.

APW President has two manufacturing units, one each in Pune and Bangalore. Elias said the current facility would be fully utilized in a year’s time.

“In 2008-09, we will have to finalise the location of a new greenfield plant. It would require an investment of Rs 80-100 crore and would have to be at least twice our existing capacity,” he said.

Source : DNA