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It was in October last that the textile machinery manufacturing major Lakshmi Machine Works (LMW's) board resolved to buyback shares.
Four months later, in February 2011, the company made an open offer. No sooner was this made than the company's Swiss partner Reiter's offloading its stake, slashing its holding from 13.19 per cent to less than 4 per cent now.
What's the Impact?
And LMW does not foresee Reiter's dilution of stake (in LMW) affect its business plans.
“Though Reiter has retained its stake with us till now, there has been no technology transfer from Reiter after 1994. In fact, they have commissioned a textile machinery plant near Pune through a subsidiary,” said LMW's Director – Finance, Mr Rajendran.
Asked if Reiter's decision to go alone would impact the segments where it (Reiter) has established a leadership position, Mr Rajendran said: “They were strong in Comber machinery segment, but over the years, we have also managed to come on par technology-wise and are now exporting comber machinery to the Far East and other countries. We do not see their presence in this segment as a threat.”
To a query on buyback of Reiter's remaining stake in the company, the Finance Director said: “We have invested up to the maximum permissible limit, which is 25 per cent of the paid up capital and reserve. That's the eligible limit. So, even if we intend to buy more, we cannot do so this year.”
LMW had informed the BSE on Monday that it had bought back 11,02,746 shares at Rs 2,045 per equity share. The number of shares bought back constituted approximately 9.79 per cent of the equity share capital of the company, post buy-back.
Reiter's offer of 11 lakh equity shares accounted for 99.75 per cent of the shares bought back by LMW. The rest was from public shareholders.
Post buy-back, the promoter's stake increased by two-and-half per cent to 28.4 per cent
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