GVFL divests stake in Colortek

Ahmedabad, Apr 12 (UNI) GVFL Ltd has fully divested its holding from Valsad-based Colortek (India) Ltd, a company producing liquid colourants for colouring plastics.

GVFL had invested in Colortek at seed stage and has over the past 13 years, helped the company through constant support and strategic intervention. GVFL has successfully divested from Colortek through strategic buyout of its stake, a company release here said.

In 1993, GVFL invested Rs 155 million in two phases from ''GVCF 1990''. The divestment for GVFL marks the successful divestiture from the 50th of its 59 investments.

''GVFL invested in Colortek as we saw an opportunity in a niche but innovative technology segment. But there were challenging moments when GVFL had to handhold and nurture Colortek. Today, Colortek divestment has become an IIM Ahmedabad case study and one of the most impressive turnaround stories in Indian venture capital history,'' said Chief Operating Officer of GVFL Ltd Bharat Kanani.

GVFL had invested in Colortek based on the experience of the original promoters, German Supporters and Technology. But the Colortek technology could not be stabilised and the company made consistent losses in the initial stages of starting operations.

GVFL, instead of closing down the company, appointed an experienced professional and CEO Ramesh Chary to bring a turnaround in the company. Also GVFL took a revolutionary step by offering part of their shares to the Colortek employees at a heavy discounted price as an incentive for milestones achieved.

CEO of GVFL Vishnu Varshney acted as the non-executive Chairman of Colortek (India) Ltd and also appointed two senior members from GVFL on the board of Colortek. They helped in streamlining internal systems, procedures and provided management support in finance, accounts, marketing and corporate governance.

The net result of GVFL's constant support across the board has bought Colortek out of all its financial troubles and it is poised for consistent growth year after year, he said.

UNI