HUL board approves share buy back at Rs280 each

Hindustan Unilever Ltd (HUL) said on Friday its board has approved the buyback of the company's equity shares at a price not exceeding Rs280 per share and up to an aggregate amount of Rs630 crore, being within 25 per cent of the total paid-up capital and free reserves as per the audited balance sheet as on 31 March 2010.

At this price, the company will pay up to Rs630 crore.

HUL's board on Friday approved the share buyback plan, and the company will now seek shareholders' approval on the proposal. The company proposes to buy back shares from the Bombay Stock Exchange and the National Stock Exchange through open market purchases from time to time.

"The buyback is proposed to effectively utilise the surplus cash and make the balance sheet leaner and more efficient to improve returns," the company said in a press statement.

The buyback will result in the promoters' stake going up. The Anglo-Dutch parent, Unilever, holds 52.02 per cent of HUL's equity, while 15.16 per cent is owned by resident individuals, 15.49 per cent by foreign institutional investors, 10.59 per cent by insurance companies and financial institutions and the rest by mutual funds, private corporate bodies, NRIs and OCBs.

Under the provisions of the SEBI (buyback of securities) regulation 1998, the promoters and the directors of the company shall not participate in proposed buyback.