Bombay Dyeing announces buyback plan

NEW DELHI, AUG. 29. Mr. Nusli Wadia's Bombay Dyeing today announced a share buyback, after which promoters' stake in the company will go up to a majority 54.47 per cent from 40.85 per cent at present. Bombay Dyeing, on which the jute baron, Mr. Arun Bajoria, has trained his guns, will buy back 25 per cent of the company's share capital from the open market at Rs. 60 per share for a maximum consideration of Rs. 143.40 crores.

The buyback offer commences on September 7 and would technically remain open till July 22 next year unless the company has completed the buyback earlier.

At present, while the promoters hold 40.85 per cent stake in Bombay Dyeing, foreign investors (including non-resident Indians, foreign institutional investors and foreign mutual funds) hold 6.35 per cent of the company's equity. Domestic financial institutions, banks and mutual funds hold another 16.91 per cent whereas 35.89 per cent rests with the public. While launching the offer Bombay Dyeing said it has accumulated satisfactory liquidity and "it is proposed to buy back a part of the shares which will provide an opportunity to the company to return the surplus funds to shareholders and improved return on equity".

Bombay Dyeing's total existing paid-up equity share capital comprises 41 million shares of Rs. 10 each and the buyback proposal envisages buying back 10.25 million shares.

While the buyback offer will not lead to any change in control of the existing management structure, the promoters cannot participate in this buyback offer as per SEBI guidelines.

- PTI

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Section  : Business
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