Financial Daily from THE HINDU group of publications
Thursday, Jun 06, 2002
Corporate - Mergers & Acquisitions
Kalyani Brakes Japanese ally to offload stake
NEW DELHI, June 5
AT a time when hordes of Indian promoters are selling off to the foreign partners in their joint venture outfits, the Indian promoters of Kalyani Brakes Ltd (KBL), the Pune-based Baba Kalyani group, is moving against the trend and bringing down foreign holding in the company from the current 53.32 per cent to 40 per cent.
The deal was recently okayed by the Foreign Investment Promotion Board (FIPB). Government sources told Business Line that the deal has been okayed subject to conformity with the Regulation 10B of the Foreign Exchange Management (Transfer of Issue of Security by Person Resident Outside India) Regulations, 2000.
KBL, promoted by Kalyani Steel Ltd (KSL) of the Baba Kalyani group, currently has two foreign partners, namely Robert Bosch Corporation (RBC) of the US and Nabco Ltd of Japan.
Each one of the partners hold 27,72,400 equity shares of Rs 10 each accounting for 26.67 per cent stake in the company. The remaining 20 per cent is held by domestic institutions and the public.
Kalyani Steel will now buy out 50 per cent of Nabco Ltd's stake accounting for 13.335 per cent equity in the company for an undisclosed amount.
After selling out half of its stake to the Indian promoters, the Japanese partner will exit KBL by selling of its remaining 13.335 per cent stake to the US partner, Robert Bosch Corporation, following which there will be only one foreign partner in the company, according to company officials.
Finally, both KSL and RBC will hold 40 per cent stake each in the company while the public holding will continue to remain at 20 per cent.
The Kalyani Brakes scrip is currently being quoted at around Rs 134, its highest in the past one year and the market capitalisation of the company currently stands at around Rs 140 crore.
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