Havells India’s Subsidiary and KRUT LED Enter $12M Joint Venture Agreement

On May 28, 2024, Havells India Limited informed in an exchange filing about the formation of a Joint Venture (JV) between a wholly-owned subsidiary of the company, Havells International Inc., and KRUT LED, LLC.

Havells India Limited stated that on October 19, 2023, the company’s Board of Directors approved the incorporation of US subsidiary companies and assigned its Executive Committee to perform all acts, deeds, and things as may be required to accomplish the said objective.

On May 28, 2024, the Executive Committee of the Board of Havells India Limited approved the execution of a Joint Venture Agreement in the ratio of 68.75:31.25, to be entered between its wholly-owned subsidiary company, Havells International Inc. (HII) and KRUT LED, LLC.

KRUT LED, LLC is a company organised under the laws of the State of South Carolina, USA, into the share capital of Havells Lighting LLC (HLL), which is currently a wholly owned subsidiary of Havells International Inc., which was incorporated in Delaware, USA, on March 19, 2024.

The objective of the joint venture agreement is to market and sell lighting products and solutions owned by Havells India Limited within the United States of America.

As per the joint venture agreement, Havells International Inc. and KRUT LED, LLC agree to invest up to $12 million, which is a Mandatory Capital Contribution. This will be invested in one or more tranches, in agreed ownership interest proportions of 68.75:31.25. This means, 68.75% of the ownership interest will be held by HII and 31.25% of the ownership interest will be held by Krut.

At the closing of the considered transaction, both partners will make a total Initial Investment of $5 million in respective proportions.

Havells India Limited will provide Havells Lighting LLC with a territory-exclusive license for the USA for lighting products and solutions for an initial term until December 31, 2028. This can be extended based on the achievement of certain revenue targets.

Havells International Inc. will have the right to majority representation on the Board of Havells Lighting LLC.

About Havells India Limited

Havells India Limited is a prominent Fast Moving Electrical Goods (FMEG) company. It is a major power distribution equipment manufacturer. The company provides a wide range of products, such as Cables and Wires, Fans, Industrial and Domestic Circuit Protection Devices, Motors, Modular Switches, Air Conditioners, Home Appliances, Power Capacitors, Electric Water Heaters, etc.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.