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Rediff.com  » Business » Ceat floats 3:10 rights, merges 3 arms

Ceat floats 3:10 rights, merges 3 arms

By BS Corporate Bureau in Mumbai
September 24, 2005 13:17 IST
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Ceat has announced the launch of its rights issue. The company's shareholders would get three rights shares for every 10 shares they hold.

The issue is priced at Rs 50 per share, 47.14 per cent discount from Friday's closing of Rs 94.60 on the Bombay Stock Exchange.

The company intends to utilise proceeds from the rights issue to augment its long-term capital. Ceat said the rights issue was priced at a discount keeping in view the interest of the shareholders - to reward them.

The RPG group, promoter of the company, is the largest shareholder with over 41 per cent stake in Ceat. While financial institutions hold close to 30 per cent stake in the company, private corporate bodies hold nearly 7 per cent. The balance is widely held by the public.

Ceat has registered a 40 per cent growth in the last three years, and expects to breach the Rs 2,000 crore (Rs 20 billion) mark in its turnover this year.

Aimed at strengthening its balance sheet, the company has also decided to merge three wholly-owned subsidiaries - Ceat Ventures, Ceat Holdings and Meteoric Industrial Finance Company - with itself. The proposed merger is effected from April 1, 2005.

These investment companies have equity stake in virtually all the group companies such as CESC, CFL Capital Services, Harrisons Malayalam, KEC International, Phillips Carbon Black, RPG Transmission, RPG Cables, RPG Life Sciences and Saregama India.

According to the annual report for 2004-05, Ceat has given loans and advances of over Rs 140 crore (Rs 1.4 billion) to these subsidiaries.
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BS Corporate Bureau in Mumbai
Source: source
 

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