BPL to raise capital via European arm
By Our Correspondent | 09 Oct 2001
Bangalore:
After the government barred BPL from accessing the capital market
for a period of three years on account of its involvement in share
price rigging, the company is thinking of using its London-based
subsidiary, BPL Eurotrade, as a
means of raising finance for capital expenditure plans in the
future.
Confirming this BPL CMD Ajit Nambiar said there is a likelihood of
the capital coming from London. Eurotrade functions as the central
procurement hub of BPL's manufacturing companies and as a catalyst
for colour television (CTV) exports. There is a lot of
commonality in the requirements of the companys different
manufacturing units and, therefore, BPL Eurotrade could leverage
on significant business opportunities, in excess of Rs 1,500 crore,
he said.
BPL feels its London arm will enhance its negotiating power with
international suppliers, which is important, as the consumer
durable industry will remain procurement-intensive. Nambiar says
procuring components at lower prices would be important even with
duties coming down from 20 per cent to 10 per cent and below in
the coming years.
BPL Eurotrade has already achieved breakthroughs with large buying
chains such as Dixons and Tesco and is working closely with CTV
manufacturers such as Sharp, Sanyo, Vityaz for meeting the
picture-tube needs of these manufacturers for their European and
Russian markets.
Recently, the Indian government prohibited BPL, Videocon
International and Sterlite Industries from accessing the capital
market for a period of four, three and two years respectively on
account of their involvement in share price manipulations in
connivance with Harshad Mehta, who was debarred for life.
BPL, Videocon and Sterlite were among the 25 companies been found
guilty of indulging in irregularities on the stock exchange such
as share price manipulation and takeover code.