Electrolux managing director Ram S Ramasundar confirmed to The Financial Express that the company proposed to put an application before FIPB within a few months.

He added that the two companies were, however, yet to start discussions on the stake transfer.

Electrolux Voltas was formed as a private limited company in mid-1998 when Voltas had hived off its loss-making refrigerators and washing machines business along with compressor manufacturing facility as joint venture with Electrolux last year. Electrolux owns 76 per cent stake in the company and once it purchases the Voltas' 24 per cent stake, the joint venture would become a 100 per cent subsidiary of the Swedish white goods major.

Electrolux application to set up a fully-owned subsidiary has earlier been rejected by FIPB on two separate occasions. The white goods company expects to get a green signal this time, as the application does not envisage setting up a separate company, but only buying out of a joint venture partner.

Voltas managing director ND Khurody is already on record stating that the Tatas were keen to divest their minority holding in the joint venture company.

Tata sources said they were awaiting clearances from the Board for Financial and Industrial Restructuring (BIFR) on the Allwyn facilities to initiate the process to sell Voltas stake in the joint venture. Voltas had acquired the Andhra Government-promoted Allwyn's bleeding white goods businesses along with operations such as watch and auto manufacturing units in mid-90s as a part of its expansion strategy.

Electrolux Kelvinator bags approval for 1:1 rights

Electrolux Kelvinator on Friday received the shareholders approval to raise Rs 68.32 crore through a 1:1 rights issue at an extraordinary general meeting held at Shahjahanpur.

Post rights issue, which is tentatively scheduled for December, the total equity base of the company will stand at Rs 136.64 crore.

The proceeds of the rights issue will be primarily used to retire a combination of short, medium and long term debt and thereby bring down interest burden on the company, Electrolux Kelvinator managing director Ram S Ramasunder told The Financial Express. A part of the fresh infusion of equity would also be used for working capital requirements and certain capital expenditure, he added.

The company had approximately Rs 96.53 crore as secured and unsecured debts in its books as of March 31, 1999, and was paying over Rs 8 crore in interest charges.

"We wanted to increase the networth and recapitalise the company," Ramasunder added, explaining the decision to go for a rights issue.

The company is awaiting Sebi clearance for the rights issue. Electrolux has already filed the draft letter of offer with regulatory body.

In a press release issued here to announce the rights issue, Ramasunder stated: "Electrolux Kelvinator will now get sufficient funds through fresh equity, thereby improving its capital gearing and strengthening its net worth."