Flextronics increases its stake in Indian subsidiary to 94.3%

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Virendra Verma

Mumbai, Dec. 21

FLEXTRONICS, a Singapore-based multinational, has acquired more than six per cent stake in its Indian subsidiary - Flextronics Software Systems (FSS) - from the open market.

Flextronics Sales and Marketing bought 21.75 lakh shares, constituting 6.3 per cent of company's equity, from the open market this week at Rs 723 per share. The total value of this purchase is Rs 157 crore.

With this purchase, the holding of Flextronics in the Indian arm has increased to 94.3 per cent. The company can go in for delisting of FSS securities.

At the end of September, Flextronics Sales and Marketing had 88 per cent in FSS. In September, Flextronics had fixed Rs 725 a share as the price to delist the securities of its Indian subsidiary from stock exchanges through the reverse book building process.

However, the shareholders of the company did not tender the desired number of shares. Of the total issue size of 1.04 crore shares, the issue received bids for 59.17 lakh shares, which is 56.78 per cent of the issue size.

After the shareholders of FSS tendered the shares, the holding of Flextronics increased to 88 per cent and the shares of company could not be delisted.

Brokers said with Flextronics holding crossing more than 90 per cent in FSS, it could de-list the securities as per SEBI rules.

On Wednesday, the FSS stock closed at Rs 695, down 2.11 per cent on the BSE.

(This article was published in the Business Line print edition dated December 22, 2005)
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