Financial Daily
from THE HINDU group of publications
Friday, August 10, 2001
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Financial Daily from THE HINDU group of publications Friday, August 10, 2001 |
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UB:Brewing a new company
THE specifics of the proposal to demerge the brewery business may not bring about any improvement in the valuation of the UB stock.
The breweries business is to vested with BREWCO. The swap ratio proposed is four shares of BREWCO for every 10 shares in UB. BREWCO is at present a 100 per cent subsidiary of UB that holds the brewery related investments of UB. Its equity would be Rs 18.
37 crore and the share capital of UB would be reduced to Rs 22.41 crore.
Though the merger may impart better focus and the distribution of ownership claims provides for a direct stake for UB shareholders in the new company, concerns over growth rates and profitability may dominate the price trends in the near term. At best, t
he UB stock may stay range-bound around the current price level. -- BL Research Bureau
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