Financial Daily from THE HINDU group of publications
Sunday, Aug 24, 2003
Financial Daily from THE HINDU group of publications Sunday, Aug 24, 2003 |
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Corporate
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Mergers & Acquisitions Hyderabad Ind may divest holding in Nepal venture C.R. Sukumar
Hyderabad , Aug. 23 CONCERNED over the economic viability of its joint venture in Nepal, the C.K. Birla-group owned Rs 337-crore Hyderabad Industries Ltd (HIL) is planning to divest its holding in the venture. According to the HIL Company Secretary, Mr D.S. Rao, the company had made an investment of Rs 1.15 crore in Nepal Metal Company Ltd (NMCL), a joint venture promoted by HIL in Nepal with the Nepal Government and others. "Owing to various concerns about the economic viability of the project being put up by NMCL, the pace of work in the said project has slowed down. The company proposes to disinvest its shareholding favouring the present promoters and/or their associates at a mutually acceptable price," Mr Rao informed the shareholders through a communication. However, pending divestment of its holding in the Nepal joint venture, HIL considers it prudent to align the investment to reflect its true and fair value. Accordingly, the company proposes to set off the amount of Rs 1.15 crore against share premium account. With the said adjustment, the company's accounting method in respect of investments would fall in line with the Accounting Standards of the Institute of Chartered Accountants of India (ICAI) and represent true shareholder value, Mr Rao said. Further, according to him, the set off would not cause any prejudice to the creditors of the company. The reduction of capital does not involve either the diminution of any liability in respect of unpaid capital or the payment to any shareholder of any paid-up capital. The company proposes to obtain the consent of its shareholders for the proposed adjustment in share premium account at the annual general meeting scheduled to be held on September 26 at Hyderabad.
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