MUMBAI, May 11: Talks between multinationals and Indian promoters are in the final stages for the acquisition of equity stakes in three Indian companies belonging to well-known industrial groups. The Indian companies are: Nocil (belonging to the Arvind Mafatlal group), PAL-Peugeot Ltd (Vinod Doshi) and Lupin Agrochemicals (Lupin group).

According to industry sources, talks between the Indian promoters and multinationals are in the final stages in all the three cases. Announcements regarding the acquisition of stakes are expected shortly, they said.

DOW Chemicals has emerged as the front-runner in the race to acquire a majority stake in the petrochemical joint venture with Nocil, an Arvind Mafatlal Group company. Three companies - Dow Chemicals, Shell and Philips Petro - were shortlisted by the Mafatlals for setting up this joint venture company for petrochemicals.

The foreign partner will pick up a majority stake in the new company which will be set up exclusively for petrochemicals business. The Mafatlals have decided to vertically split Nocil into two companies - one for petrochemicals and the other for rubber chemicals. The move has been initiated to generate funds for the group's expansions. Nocil's plans to expand and modernise its naphtha cracker plant at Thane have been lying idle due to a cash crunch situation. The company then initiated talks with interested parties asking them to pick up stake in the company for implementing the Rs 5,000 crore project. The Mafatlals have resolved to concentrate on core business activities.

In the case of PAL-Peugeot, Peugeot of France and the Doshis are equal partners in the venture with 31.7 per cent stake each on a capital base Rs 264.6 crore. PAL's contribution to the equity, funded by the transfer of the Kalyan plant to PAL-Peugeot, was Rs 84 crore. Problems between the two promoter groups began when Peugeot, in late 1996, wanted to recapitalise the Rs 92 crore loss that had piled up due to industrial unrest at the plant. The French auto giant is negotiating for buying out the stake of the Doshis. ``Now the two sides are trying to work out a suitable price for the shares held by the Doshis. The company is expected to come out with new models once Peugeot gets full control of the company,'' said sources close to the Doshis who have also tied up with Fiat of Iatly for another auto venture.

The Lupin group, belonging to Desh Bandhu Gupta, was negotiating with several multinationals to sell part of its 100 per cent stake in rs 130-crore Lupin Agrochemicals. A Danish company, Cheminova, has now emerged as frontrunner to acquire stake in the Lupin firm.

The money raised from the equity sale will be used to expand other business operations. The Rs 1000-crore Lupin group had burnt its fingers by diversifying into the real estate business. Sources in the group refused to comment on the status of the share acquisition.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.