De La Rue braces for RBI contract loss

De La Rue braces for RBI contract loss

De La Rue is bracing for confirmation from the Reserve Bank of India that it is to move to a new consortium of printers after the UK banknote maker's contract was suspended last year due to printing irregularities

UK broadsheet, the Independent on Sunday reports that the Indian central bank is set to announce a new deal with a group of rival suppliers, with Giesecke & Devrient GmbH, Fortress Paper Ltd. (FTP) and Arjowiggins SAS favorites to split the contract.

Shares in De La Rue crashed last year as the company revealed that its largest customer had suspended production due to quality control issues. The firm's CEO was forced to resign and the Serious Fraud Office was called in as it emerged that staff had "deliberately falsified" paper specification test certificates on banknotes.

The loss of the contract will increase pressure on De La Rue, which has been the subject of takeover speculation since the scandal broke.

French card manufacturer Oberthur, which last month entered into exclusive negotiations with Advent on a €1.15bn deal for its card systems and identity divisions, is expected to use the proceeds of the sale to fund another bid for De La Rue after a joint bid with Bain Capital foundered earlier this year.

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