Financial Daily from THE HINDU group of publications
Friday, Apr 21, 2006
Financial Daily from THE HINDU group of publications Friday, Apr 21, 2006 |
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Info-Tech
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Mergers & Acquisitions Aksh Broadband to be merged with Optifibre Nilanjan Dey
The move is intended to consolidate the holdings of Aksh Broadband's strategic investors and is expected to generate greater value for shareholders of the bigger company.
Kolkata , April 20 Aksh Optifibre Ltd (AOL) has proposed to merge its associate company Aksh Broadband, in which it holds 27 per cent, with itself. The decision is prompted by the need to create a bigger entity and unlock value for shareholders. The Aksh Optifibre board on Thursday decided to appoint two consultants to facilitate the valuation of Aksh Broadband. Their reports will help initiate the merger process. The company, said Dr Kailash Chaudhari, MD, plans to make the associate venture an integral part of its business. The idea is to strengthen the company's operations, which he said are expected to grow rapidly in the days to come. "We intend to consolidate the holdings of Aksh Broadband's strategic investors," he maintained, adding that the proposed transaction should generate greater value for shareholders of the bigger company. It may be mentioned here that promoters' holding in Aksh Optifibre (according to information provided by NSE pertaining to December 31, 2005) stands at over 30 per cent. About 41 per cent is held by the Indian public, while private corporate bodies have 15 per cent-plus with them. The company, which has a paid-up equity base of about Rs 11 crore, had in a recent EGM resolved to raise $20 million or so. Incidentally, the shareholders' meeting had also authorised the company's board to make additional investments up to Rs 40 crore in Aksh Broadband. The latter is an unlisted entity. The copmany on Thursday informed that it has proposed a dividend of Rs 1.75 per share (face value: Rs 5) or 35 per cent. For the year ended March 31, 2006, it has posted a post-tax profit of Rs 14.83 crore on net sales of Rs 113.17 crore. The company, Dr Chaudhari indicated, hopes to gain from an upswing in demand and a firming up of prices. "The current fiscal should be better in terms of turnover and profitability", he said. On Thursday, its stock closed at Rs 80.10 on the NSE after reaching the day's high at Rs 83.90.
More Stories on : Mergers & Acquisitions | Broadband
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