Madura Coats to buy back 18m shares
By Our Corporate Bureau | 18 Oct 2001
The buyback price of Rs 27 per share offers a premium of 23.85 per cent over Madura Coatss closing price of Rs 21.80 on the National Stock Exchange on 20 September 2001.
The parent company, J&P Coats, currently has a 51,52-per cent stake in Madura Coats. The buyback by Madura Coats represents 25 per cent of its total paid-up equity capital and, if subscribed fully, will enhance the holding of J&P Coats to 68.69 per cent. As per Sebi regulations, if the number of shares tendered is in excess of 18,044,000 shares, the buyback will be made on a proportionate basis.
Explaining the rationale for the buyback, Madura Coats finance director C R Bevan said: We had, in 2000, completed the sale of the Madura garments division for a consideration of Rs 189.23 crore to the Aditya Birla group. With no major capital investments foreseen in the near future, it is appropriate to reduce the companys capital base. The company has, accordingly, decided to provide an attractive opportunity to its shareholders to make an appropriate choice.
The company had a total income of Rs 8,482.39 million and a loss of Rs 127.79 million for December 2000. The offer is being managed by DSP Merrill Lynch Ltd and the registrar to the offer is Alpha Systems Pvt Ltd.
Madura Coats Limited is the market leader in sewing threads and has a strong presence in garment accessories, canvas and industrial textiles, with a special focus on exports.
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