MUMBAI, November 4: Voltas has sold its thermostat division to British multinational Siebe Plc. The Tata group company posted its first-ever loss last year.

The UK-based company has purchased the division through its wholly-owned Indian subsidiary Siebe India, which will start off its domestic operations through this plant. Its output will be part-lifted by Voltas itself, which requires thermostats for manufacture of cooling apparatus.

The sale agreement between the two companies was signed last month, and Siebe has already taken over the Pune plant, Voltas sources said. According to the agreement, Siebe will retain all the 111 workers of the plant.Voltas has, however, refused to divulge the price at which the division has been sold to Siebe. The total value of assets and the accumulated loss of the division does not add up to any significant financial gain for Voltas, sources said. "The idea of the sale was not to boost the company's `other income' but to shed units which do not add to the value chain," the sources said.

The turnover of the thermostat division has improved over the last three years to Rs 1.46 crore in 1996-97 from Rs 1.05 crore in 1995-96, Rs 0.78 crore in 1994-95 and Rs 0.13 crore in 1993-94. The utilisation of the company's 1.3 million numbers thermostat capacity has been lagging at around 30 per cent for the last two years.

All decisions on the sale or on hiving off non-core businesses will now be taken after the final set of McKinsey recommendations on restructuring of the entire Tata group, which will be tabled later this month, is studied at length by the Voltas board. Though none of the McKinsey recommendations will be binding on Voltas or any other group company, the report will provide only broad guidelines, the sources said.

The Voltas management, under the new managing director Nawshir Khurody, has taken a decision that only two of the company's divisions -- the cooling business division and engineering divisions -- are its "core areas of operation" which will be retained under any circumstances.

The Voltas board has already taken a decision to sell two of its loss making subsidiaries--Voltas Switchgear and Premium Granites. The process of scouting for a buyer for the divisions has already been initiated, the sources said. While both the divisions have been making considerable losses over the last few years, the switchgear subsidiary lags way behind market leaders Larsen & Toubro or Crompton Greaves.

Also on the block are the white goods division, which has turned out to be a major drain on Voltas' finances, and the agrochemicals business. Voltas has been examining the possibility of hiving off the agrochem division to some other Tata group company with interests in similar lines of business. Voltas will however retain the chemicals trading division. A final decision on the agrochem division will be taken after a consultant tables its report on whether the division should be sold or hived off into a joint venture with a strategic partner. The company has kept its options open on a similar arrangement for the white goods division. Presently, it is in negotiations with some multinationals for leasing out its excess capacity.