ABB, a global power and automation technology group, has successfully increased its stake, through an open offer, from 52.11 to 75 per cent in its Indian subsidiary.
During the three-week offer period, which closed on Tuesday, shareholders of ABB India tendered approximately 23 per cent of the outstanding shares. ABB will acquire the shares on a proportionate basis since the offer has been oversubscribed by around 1.5 per cent.
The offer of Rs 900 per share, which was announced on May 17, valued the transaction at $965 million (based on foreign exchange rates at the time of the announcement).
The final payment and credit of shares tendered is expected on or before August 10, 2010.
A post-offer public announcement, in accordance with local requirements, with details of the shares tendered in the open offer, will be published once the acquisition of shares has been completed.
The open offer is being managed by HSBC Securities and Capital Markets (India) Private Limited. ABB Ltd during the past year faced some tough conditions, as major buyers of its power equipment deferred or cancelled orders. The company was also hit severely by increased credit risk and its decision to exit the rural electrification business.
It posted a drop of 91 per cent in its net profit to Rs 6.6 crore during the first quarter of 2010, having had to cope with foreign exchange losses and cost over-runs in some of the projects. Revenue of the company, however, saw a marginal rise of 4.5 per cent to Rs 1,455.8 crore during this period.
The order book of the company also showed strain, with a drop of 26 per cent to Rs 1,688.7 crore in the first quarter of this calendar year. By the end of March, the order backlog for the company was at Rs 8,753.50 crore, a 24 per cent rise over last year.
On the basis of a full year of 2009, ABB Ltd posted a net profit of Rs 354.63 crore, a 35 per cent drop over the corresponding period last year. Revenue of the company during this period stood at Rs 6,237 crore, an 8.7 per cent drop over the same period last year.
