Search the Internet          Tips  Sites: Finance, Investment

UTI exits Sterlite via buyback

Savio G Pinto

The Unit Trust of India, participating in the buyback offer of Sterlite Industries, has encashed the cheque for its entire holding of 1.37 per cent of the capital amounting to 763,000 shares.

The buyback programme of Sterlite was expected to face some hassles, with the Life Insurance Corporation of India deciding not to participate in the programme.

Financial institutions including LIC, UTI and General Insurance Corporation held around 7.69 per cent of the company's equity share capital.

Though UTI has decided to tender its shares, LIC and GIC, it is reliably learnt, have not participated in the offer and have not encashed their cheques.

The participation of the institutions in the buyback offer is of importance since it could have a bearing on whether the company would be able to delist its shares after the buyback or not.

The company had earlier cautioned investors that in the event of the public holding falling below 10 per cent, the company would have to compulsorily delist from the bourses.

LIC, one of the major institutional shareholders in the company, had voted against the scheme of arrangement at the extraordinary general meeting and has also written to the company of their decision not to opt for the scheme.

However, details of the overall level of participation in the buyback scheme were not available since the matter is currently sub-judice and no company official was available for comment on the issue.

The company had announced a buyback of shares which is currently underway for up to 279,96,278 equity shares of Rs 5 which is approximately 50 per cent of the paid-up equity capital.

The buyback plan is being done at Rs 150 per share with Rs 100 being discharged in cash, while the balance Rs 50 by way of allotment of 10 per cent secured non- convertible debentures.

Powered by

ALSO READ:
The UTI Crisis
The Rediff Budget Special
The Rediff-Business Standard Special
Money