MUMBAI, Aug 13: The KSB group is buying out MIL Controls Limited, the Kerala-based company of the UB group. The German multinational KSB will acquire a majority 51 per cent stake in MIL Controls while its Indian ally KSB Pumps will pick up the remaining 49 per cent.

The move fits in with UB group chairman Vijay Mallya's strategy of withdrawing from non-liquor businesses. UB has been scouting for a buyer for MIL Controls as part of its efforts to concentrate on its core liquor business. KSB Pumps has convened an extraordinary general meeting (EGM) of shareholders on September 2 to seek approval for an investment not exceeding Rs 6.5 crore to acquire the 49 per cent stake in MIL.

The notice sent to shareholders states: ``consistent with government policy and encouraged by the success of its existing collaboration, KSB AG (hereinafter referred to as KSB Group) proposes to start a joint venture in India by acquiring 51 per cent share capital of MIL Controls.''

When contacted, a senior KSB Pumps official confirmed the deal by saying that negotiations had reached an advanced stage and the deal would be finalised shortly. KSB Group was keen on taking over MIL following its decision to focus on control valves business in Asia with India as the manufacturing base, according to sources.

KSB group's present range of products does not include control valves and inclusion of this would provide appropriate synergy, sources added. The joint venture will consolidate the position of KSG Pumps since it already has a major presence in the control valves market.

MIL Controls was originally promoted by Kerala State Electronics Development Corporation (Keltron). It was taken over by United Breweries four years back as part of its diversification efforts.

MIL has its registered office and factory situated in Alwaye, Kerala. It is a profit-making company and has been paying dividends for the last five years. The company posted sales of Rs 19.2 crore for the year ended March 1996 against Rs 16 crore in the previous year.

It recorded a profit of Rs 92.29 lakh during the same year. Exports contribute substantially to its turnover with a major presence in the Gulf countries.

The existing paid-up share capital of MIL Controls is Rs 1.5 crore divided into 15,00,000 equity shares of Rs 10 each.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.