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Dhir India Inv. plc (DHIR)

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Wednesday 03 October, 2007

Dhir India Inv. plc

Second Investment

Dhir India Investments plc
03 October 2007



3 October 2007


                           Dhir India Investments plc

                        ("Dhir India" or the "Company")

           Investment of £1.1 million in Lords Chloro Alkali Limited


Dhir India (AIM: DHIR), the first UK quoted company established to invest in the
circa $50 billion* Indian non performing assets sector, announces that it has
acquired 1,500,000 new equity shares in Lords Chloro Alkali Limited ("LCAL") at
a price of 74 pence per share, representing 5.96% of the issued share capital.
The investment will help to fund significant expansion of LCAL's plant capacity
and will facilitate the long-term revival and turnaround of LCAL.

Based in Alwar, Rajasthan, LCAL manufacturers caustic soda, liquid chlorine,
hydrochloric acid, stable bleaching powder and hydrogen products, supplying the
paper, soap, dyes, chemicals and plastic industries. The company was
incorporated in 1979 and had performed satisfactorily until 1997 when it
incurred significant losses as a result of lengthy power cuts and input
production costs. In 2001, LCAL filed reference with the Board for Industrial
and Financial Reconstruction and in 2005 Dhir Group acquired a strategic stake,
representing around 32% of the issued share capital, and installed a new
management team.

Since that time, the team has effected the recovery of the business, with sales
increasing by more than 200%. For the year ended 31 March 2007, LCAL reported an
EBITDA of £0.31 million on turnover of £8.61 million. As at 31 March 2007 the
Net Worth of the company has also turned positive and it has become a debt free
company. Grant Thornton has recently valued the assets of LCAL at $42.08 million
and determined the value of the equity shares at 83 to 92 pence per share.

The management of the company are now setting in place plans for further
capacity expansion and plant improvements, which will result in increased
economies of scale and competitive advantages.

Demand in India for caustic soda has increased dramatically in recent years and,
in 2006-7, the country imported 148.2 thousand metric tonnes. Industry dynamics,
coupled with a capable management team now running LCAL's recovery and growth,
have provided the company with an opportunity to become a major player in the
caustic soda industry, providing shareholders with increasing returns.

Commenting on the investment, Alok Dhir of Dhir India commented:
"Since the introduction of the new management team, significant progress has 
beenmade at LCAL. The capacity of the plant has been substantially increased, 
the technology enhanced and the future prospects are extremely promising.

"The market fundamentals for the chemicals LCAL manufacture are expected to
remain favourable in the medium term and the board envisage completing the
project and realising its value over a two year period."


(*Source: The Wharton School, February 2007)


For further information, please contact:

Dhir India Investments       Evolution Securities       Tavistock Communications
Alok Dhir                    Tom Price                  Simon Hudson
Shivi Agarwal                Jeremy Ellis               Rachel Drysdale
Chris Clarke
Tel: +91 11 424 10000        Tel: +44 (0)20 7071 4300   Tel: +44 (0)207 920 3150


About Dhir India
Dhir India provides shareholders with both income and capital growth and was the
first UK quoted vehicle to provide western fund managers with the opportunity to
invest in the Indian non performing assets market. In July 2007 it raised £25
million and commenced trading on AIM.

The Company primarily considers four types of investment opportunity:
       - Turnaround of companies
       - Re-sale of assets or companies
       - Break-up and sale of assets
       - Bridge financing

The current stock of non performing assets (NPAs) in India was built up
primarily as result of the transformation of the Indian economy in the 1990s
from a centrally regulated to a more free market economy. During this time,
commercial lending rates were as high as 18-20 per cent. per annum, whilst the
industrial growth rate remained sluggish at 2-3 per cent. per annum and Indian
industries could not cope with the competition from international companies,
which did not have such a high cost of capital.

This has created an opportunity to invest in NPAs, which are typically
over-leveraged capital structures with insufficient liquidity and in default of
their obligations to creditors. Often these companies have significant assets
and/or solid underlying business fundamentals, which are not being fully
utilised in spite of the fact that the rate of growth in the industrial sector
has caught up with that of the rest of the economy, being an estimated 9-10 per
cent. per annum since 2004-2005.

In such circumstances, Dhir India believes that the resolution of the existing
debts, and in some cases a turnaround of the underlying business, can lead to
substantial profits on exit from the investments being generated in the short
and medium term.




                      This information is provided by RNS
            The company news service from the London Stock Exchange

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