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Bata BV may delist holding firms

June 28, 2005 12:19 IST

Bata BV of the Netherlands, the parent company of Bata India Ltd, is examining the option to delist all holding companies in different countries, after which all these entities would be brought under a central listing system on one stock exchange.

The process would be preceded by enhancing Bata BV's stake in each of these companies to the level at which delisting would be possible.

The resolution to buy back shares of Bata India by Bata BV that was passed by Indian shareholders in the recent past was part of this plan of the parent company.

Talking to Business Standard at the sidelines of Bata's 72nd annual general meeting in Kolkata on Monday, Constantin Salameh, vice president Bata Brand, and an independent director at the Board said that the Bata family would be taking a taking a view on enhancing its holding in Bata India once the restructuring was over and as soon as the company turns around.

The option being looked into by Bata BV was formation of a company, which would be holding all its operations in overseas countries and this single entity would be listed in a single stock exchange.

Salameh also said that at present this option was being seriously looked into in a number of countries where Bata operations was making profit.

"In India, the option would be initiated once Bata India was brought back on the track," Salameh explained.

Bata NV has decided to forego the technical collaboration fee it used to pay to Bata BV for providing technology and other related services.

Addressing the shareholders today, chairman, Bata India, PM Sinha said, "Bata India and Bata BV have mutually decided that the former would not be paying any collaboration fee to the latter until Bata India returns into the black. Bata India did not pay any collaboration fee to Bata BV for the last five quarters. We would resume payment of the fee once we are in a position to do so."

Meanwhile, Bata India has also initiated a financial restructuring exercise under which it would try and bring down its interest cost on loans availed by as much as two per cent.

"At present we have been paying around nine per cent to our creditors. The exercise being undertaken would also involve loan swapping, paying off of high cost short term loans with the proceeds of the rights issue," explained Sinha.
Debjoy Sengupta in Kolkata
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