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Electronics Production | November 26, 2008

Finnfund to invest in Incap's operation in India

To fund Indian investments and working capital, Incap has entered into a financing contract with Finnfund (Finnish Fund for Industrial Cooperation Ltd).
Finnfund will make a share capital investment, totalling EUR 2 million, in Incap CMS Pvt. Ltd., Incap's India-based subsidiary. The funding will be available for Incap by the end of 2009. Once the entire investment has been withdrawn, Finnfund will own a total of 32.6% of the share capital of Incap CMS Pvt. Ltd. According to the terms and conditions of the contract, Incap will withdraw from the contract in 2011 at the earliest and 2014 at the latest.

For the India-based subsidiary, the investment is equity-based. Due to the terms and conditions of the contract, the investment is regarded as a long-term loan in the Group's IFRS financial statement.

"We are very satisfied that Finnfund will participate in the development of our business in India," says Sami Mykkänen, President and CEO of Incap Group. "Finnfund's financing enables investments and business growth that meets the customer demand and our strategy in India. We are also looking forward to utilising Finnfund's extensive know-how on matters related to, for example, environmental and social responsibility."

"The India-based contract manufacturing unit we acquired last year has met our expectations, particularly with regard to delivery capability, personnel competence and design expertise. New accounts have started in a promising way. However, business development has been slower than we initially expected."

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