Wednesday, December 27, 2006

Mumbai-based Rama Pulp and Paper acquires newsprint company

Mumbai-based cultural and specialty paper maker Rama Pulp and Papers is acquiring a newsprint company for Rs. 60 crores. The deal will be funded by an undisclosed foreign fund. Rama Pulp has declined to name the target company and the foreign fund owing to confidentiality clauses.

The fund will provide Rs. 50 crores for the acquisition while the rest will come from the company’s internal accruals.

Opportunities in newsprint and its low costs have attracted foreign players too, with majors such as Stora Enso and UBA mulling options to build a plant in India mainly to cater to the local market.

Of late, foreign funds’ interest in the Indian paper sector has been growing steadily. IFC, the investment arm of the World Bank is already in collaboration with West Coast Paper, JK Paper and AP Paper. Other firms like Goldman Sachs are more keen on picking up equity stakes in Indian paper companies as an 8% growth in the local economy makes paper all the more attractive.

Read the complete article from The Economic Times.

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