ALBRIGHT & WILSON CHEMICALS INDIA LTD - EVENT UPDATE

I have recommended Albright and Wilson Chemicals @ Rs.185 (Click HERE to read the old posting) which is currently trading around Rs.280/- .In an important development ,  the Belgian chemical giant  Solvay launched a 3,4 billion euro takeover bid for French Chemical company Rhodia . Rhodia UK (Part of Rhodia France) is the parent company of Albright and Wilson Chemicals India Ltd .Earlier the BSE listed Solvay Pharma was taken over by Abbot group and this listed entity is going to merge with Abbot India . So, Solvay is expected to work in India through AWCIL( the only fully owned company of Rhodia in India) going forward.An open offer by SOLVAY for AWCIL is also a possibility . (Indirectly the ultimate parent is changing) .Even if the open offer is excluded in any case Solvay's strength  will surely help  AWCIL to perform better in the future, by all means.

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ALBRIGHT & WILSON CHEMICALS INDIA LTD - Turnaround Time ?

Albright and Wilson Chemicals(AWCIL) is part of  € 5,226 million world chemical giant Rhodia group .
Rhodia UK holding about 73 % stake in its small equity of Rs.3.37 Cr.AWCIL is manufacturing various type of Surfactants used in home and personal care industry.Using the strong network of Rhodia AWCIL is exporting its products to various countries.Company had two units ,one in Ambernath and other in Roha.In 2008 company suspended the manufacturing activities of its Ambernath plant and  in 2010 it increased the capacity of Roha plant.Land  at Ambernath is now up for sale.Last year company posted a loss of Rs.23 Cr mainly on account of retirement compensation for the employees of Ambernath plant (Rs.10 Cr) ,depreciation of Rs.5 Cr and an interest payment of Rs.2 Cr. On sale of Ambernath land company can repay the loans and deploy the balance in the business. Based on the revival in FMCG industry both in India and abroad company started  showing some improvement in its performance.AWCIL's financial year ending is in December .For the FY 2010,company posted a turnover of Rs.164 Cr( Rs.98 Cr) and a net loss of Rs.3.69 ( loss of Rs.21 Cr) . With the strong support of Rhodia,expanded capacity utilisation,possibility of debt free status in near future and a revival in  product demand - AWCIL is expected to turnaround in near future . Possibility of a de listing offer can't be ruled out. Investors with some risk can consider AWCIL which is currently quoting around Rs.185/-