The Hindu Business Line : LG India to get rid of `excess' shareholders

LG Electronics India Ltd (LGEIL), the Indian arm of LG, has now decided to rid itself of "excess" individual shareholders in order to retain its original shareholding pattern.

The need arose following the merger of the telecommunications company, LG Electronics System, with LGEIL.

The company has got the Foreign Investment Promotion Board's (FIPB) nod for transfer of equity shares of LGEIL to LG Electronics Inc, Korea.

In its application, the company had stated that after the proposed transfer of shares the equity holding pattern would remain the same. The company has a paid-up capital of Rs 113 crore.

Mr S.N. Ajmera, Senior General Manager Finance, LGEIL, said: "We had sought their permission to allow us to transfer equity shares of the company, which are held by LG Electronics Inc, Korea jointly with resident individuals to the single holding of LG Electronics Inc."

The merger had led to LGEIL having more individual shareholders than required, he added. "This move is mainly to the release our shareholders."

Mr Ajmera said, "Post-merger, LG Electronics System India has become a division of LGEIL and is known as its information and communication (I&C) division. This division is into the business of digital WLL systems and presently caters to PSUs."

The company has approval to manufacture, market and sell electrical and electronics appliances.

It also has the permission to manufacture of CDMA WLL infrastructure equipments and CDMA remote subscribers units.

The company is also engaged in wholesale marketing and cash-and-carry stocking as well as sale of GSM handsets.

Putting to rest all speculation on whether the company would come out with an IPO or not, and whether it formed part of the FIPB clearance which the company attained in 1997 for venturing into the Indian market, Mr Ajmera said, "No such stipulation formed part of the FIPB nod. Besides, if at all the company decides to tap the capital market, it would because LG wants to do so and not because it has been mandated to do so."

LGEIL is targeting a turnover of Rs 7,000 crore for 2004.

It now aims to capture a sizeable market share in the GSM segment also, which the company entered in late 2003.

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