Phillips Electronics India (formerly Philips India) got its second buyback offer approved by the majority shareholders at its 79th annual general meeting here on Friday.
The first buy back offer after delisting could not shake off minority shareholders, who still collectively hold 3.64 per cent.
Mr Murli Sivaraman, Vice-Chairman and Managing Director of Philips Electronics India Ltd, while talking to newspersons after the annual general meeting, ruled out the possibility of re-listing of the company though promoters’ holdings might come down as they would be participating in the buyback.
Last year, the company had run a buyback programme, which evoked poor response from the minority shareholders.
Mr Sivaraman told shareholders that the management created a “window of opportunity” for the remaining minority shareholders.
Offer price
But the price offered this time is lower at Rs 242 a share against Rs 260 last time.
The buyback size represents 17.2 per cent of the aggregate of the company’s current paid-up capital and free reserves.
This, however, represents 9.5 per cent of the outstanding fully-paid shares of the company as on January 1.
The overseas promoter of the company – Konninklijke Philips Electronics NV – has expressed its intention to buy back maximum to the extent of 9.2 per cent at the offer price.
After the buy back, the equity capital would obviously come down to the extent of the response and the debt-equity ratio would be “well within” 2:1, as prescribe by the Companies Act.
Under Section 395 of the Companies Act, promoters can force a shareholder to sell his shares if public holding is less than 10 per cent after coming up with one more open offer.
According to company law experts, the company is providing one more opportunity, which could be the last one, to minority shareholders for an exit.
Mr Sivaraman said an independent valuer (Deloitte) has arrived at the buyback price on offer, which would remain valid for 12 months from Friday.
Sales growth
Phillips, despite seeing a drop in sales in second half of 2008, reported a 8.2 per cent growth in net sales for the calendar year. PAT was Rs 135 crore (Rs 190 crore). It is paying a dividend of Rs 2 a share of Rs 10 each.
Source: The Hindu Businessline