Warren Tea promoters dilute stake through bonus issue

Our Bureau Kolkata | Updated on March 22, 2013 Published on March 22, 2013

Warran Tea promoters complied with minimum shareholding norm of 25 per cent by coming out with bonus issue. The company fixed March 22 as the record date for the issue of bonus shares only to the public shareholders in the ratio of seven shares for every 10 shares held.

Currently, promoters hold 83.51 per cent stake in the company. The bonus issue would reduce the shareholding of the promoters on the expanded equity base and bring it down to 74.9 per cent, complying with the SEBI norm on minimum public holding of 25 per cent.

Listed only on the BSE, the Warren Tea stock, which slumped 20 per cent after turning ex-bonus on Thursday, lost another 20 per cent on Friday to close at Rs 238.9.

According to a BSE calculation, the last cum-bonus price worked out to be Rs 372.23 after adjusting the bonus shares of public holders.

Bonus & demerger

The bonus issue and the increase in public holding level are significant because Warren Tea is in the process of demerger. A scheme of arrangement for demerger of the James Warren Tea division of the company effective from April 1, 2012, had been approved by Warren Tea board on August 11 last year.

This scheme was further updated incorporating bonus issue proposal in February.

As the consideration, public shareholders of WTL will get 1 share in the demerged entity — James Warren Tea Pvt Ltd (JWTPL) — for a share of WTL.

This means the JWTPL on completion of demerger will have 25.1 per cent public shareholding and would be eligible for listing as a public company. The two promoter factions of TWL in the past fought a legal battle before coming to the compromise on assets demerger. JTWL will get seven out of 14 tea gardens of WTL. The remaining will stay with TWL.

Published on March 22, 2013
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