Financial Daily from THE HINDU group of publications
Friday, Nov 19, 2004
Financial Daily from THE HINDU group of publications Friday, Nov 19, 2004 |
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Corporate
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Mergers & Acquisitions SPIC to hike stake in SPEL to over 50 pc
Kohinoor Mandal
Kolkata , Nov. 18 SPIC is increasing its stake in SPEL Semiconductor Ltd to over 50 per cent. In the process, SPEL will become a subsidiary of SPIC. SPIC has decided to invest Rs 36.80 crore in SPEL by way of subscription of 1.47 crore equity shares of Rs 10 face value. SPIC is also paying a premium of Rs 15 on each share. There will be no formal investment by SPIC in SPEL. The former is actually converting its unsecured loan worth Rs 36.80 crore it granted to SPEL. This is a part of a scheme of arrangement proposed by the SPEL board of directors. Currently, SPIC holds 34.97 per cent in SPEL. Following this financial restructuring, SPIC's stake in SPEL would increase to 55.62 per cent. A statement from SPIC has justified the proposed investment in SPEL. "The price of Rs 25 per share, as valued by Indbank Merchant Banking Services Ltd, at which SPEL has offered to convert the unsecured loan of the company into equity shares, is justifiable in the backdrop of SPEL's performance potential and bright prospects for growth." For the year ended March 31, 2004 SPEL registered a 54 per cent growth in revenues at Rs 81.57 crore from Rs 53.03 crore in 2002-03. The company also recorded net profit of Rs 45 lakh compared to net loss of Rs 145 lakh the previous fiscal. According to SPIC, the semiconductor business in the international arena is recording compounded annual growth rate (CAGR) of 10.6 per cent. "To take advantage of the increasingly positive business climate, SPEL has charted an aggressive growth path in the coming years through expansion and new product introduction," SPIC said. The SPIC board has already accepted the SPEL proposal. The company has now sought a go-ahead from IDBI, which is its corporate debt restructuring monitoring agency.
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