The Hindu Business Line : CSE to hold board meetings on demutualisation, land disposal

Kolkata, Aug 9 The Calcutta Stock Exchange plans to convene extraordinary general meetings by month-end as part of its attempts to carry out two crucial plans – wrap up its demutualisation programme and disposal of surplus land.

The exchange, functioning under a SEBI-appointed Administrator, has proposed to create and allot up to 3.25 lakh equity shares, each carrying a face value of Re 1. This will be taken up at the first EGM.

Members are expected to authorise the management to determine the terms of the issue, including the number of equity shares that may be allotted to each investor as well as the price at which such shares may be allotted in line with the recommendations placed by the Empowered Committee of the exchange.

The EGM, according to a notice sent to members, follows a meeting held in May, which decided to sub-divide each share of Rs 250 into 250 shares of Re 1 each. A sub-group formed by CSE’s Empowered Committee is said to be in the process of holding negotiations with various potential investors.

PricewaterhouseCoopers, mandated as consultants, has already carried out a valuation exercise.

It may be mentioned here that a gazette notification (November 2006) has stipulated that no person can acquire or hold more than 5 per cent of the paid-up capital of the exchange. CSE, in line with the Demutualisation Scheme of 2005, must ensure that at least 51 per cent of its paid-up equity is held by the public other than shareholders carrying trading rights.

CSE’s second EGM, which is scheduled not much later, will deal with the surrender of a 10-acre plot on the Eastern Metropolitan Bypass, one of the city’s arterial roads. This plot is held by CSE on lease from the local municipal authority.

A number of terms have been set for completion of the transaction, it is pointed out. These include:

*A section of the plot, measuring 5 acres, will be sold by Kolkata Municipal Corporation (KMC) through bidding/auction for commercial use; 60 per cent of the proceeds will be paid to CSE as grant.

* KMC will return to the Exchange the original premium paid by CSE for the balance five acres.

* The West Bengal government will arrange for the allotment of an additional 5 acres in Rajarhat, a major township that is coming up on the eastern fringes of the city. The price will be fixed by WB HIDCO, the local housing authority.