17 June 2003 00:10 [Source: ICIS news]
NEW DELHI (CNI)—The Indian finance minister is shortly expected approve a proposal by Monsanto India Ltd (MIL) to buy back 3.80% of its equity capital at a maximum price of Rs575 ($12.32/Euro10.42) for each Rs10 share on the Bombay Stock Exchange and National Stock Exchange.
The buyback would increase Monsanto Co’s stake in MIL from 72.15% to 75.95%. Under India’s Companies Act, a promoter with 75% equity stake has absolute control over its company. The buyback would thus increase the effective control of Monsanto group of the US over its Indian subsidiary.
Official sources said the Foreign Investment Promotion Board (FIPB) had recommended the proposal to the finance minister for approval, subject to MIL complying with all standard regulations.
MIL would buy a maximum of 328 478 shares at a total price not exceeding Rs188.8m. The present equity stake of 72.15% is held by Monsanto Co and two other Monsanto group companies.
MIL operates is a leader in the herbicides market with global brands such as Roundup, Machete, Lasso, Avadex and Leader. It also produces high-yielding seeds of soyabean, sunflower, maize, and other crops. It has manufacturing facilities at three locations in Maharashtra, Karnataka and Union Territory of Dadra & Nagar Haveli.
MIL earned a net profit of Rs505.8m on total income of Rs2.99bn
in its financial year to 31 March 2003.
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