New Delhi, July 17
ICI India Ltd, which manufactures chemicals and paints, today said that its board plans to meet on July 25 to consider buying back the company's shares, using some of the idle cash.
The company will spend Rs 125 crore of the Rs 200 crore cash it had as of March 2006 to increase the shareholding by five per cent to 56 per cent.
As much as 25 per cent of the company's capital and free reserves may be used to buy back the shares at a maximum price of Rs 350, the company said.
Mr M.R. Rajaram, Executive Director, said that the company ended 2005-06 with surplus cash of about Rs 200 crore.
It has already invested about Rs 55 crore in acquiring 49 per cent interest in Quest India from its joint venture partner, HLL, taking its shareholding in the company to 99 per cent.
Another Rs 3-4 crore will be invested to convert Quest India into a 100 per cent subsidiary prior to its merger with ICI India.
"The proposed buyback will utilise about Rs 125 crore and the balance surplus of Rs 20 crore would be spent on augmenting capacities, especially in paints and in setting up additional colour solution units to support the growth strategy for paints," he said.
The ICI scrip gained 2.35 per cent on Monday to close at Rs 301.9 on the BSE.
The necessary board and shareholder approvals are expected to be obtained by September-end.The company also said that its Uniqema divestment, which was announced in June-end, is progressing as per plan and is expected to be complete by the calendar year.In the first week of July, ICI had concluded the agreements for sale of its Uniqema business for Rs 280 crore with Croda."Shareholder approval is expected by mid-August. This, together with cash generation of the current year, will be utilised for the growth of core businesses, for which plans are being worked out."Related Stories:
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