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Fipb Nods Mico Buyback Plan, Reebok Imports

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BUSINESS STANDARD

The Foreign Investment Promotion Board (FIPB) has cleared the proposals of Motor Industries Company Ltd (MICO) for a share buyback and Reebok India's plan to import and market its shoes locally.

In its final meeting of the year, the board has also given its nod to the proposal of Kellogg India to sign up a new royalty payment scheme with its US parent following the expiry of the old scheme in September last.

Proposals of IWM Constructions, Coim India Pvt Ltd for extension of test-marketing period of polyesters and polyurethane granules, etc, Haryana Telecom for royalty payment based on a new BIFR package, Bodygear International for issue of fresh equity for manufacture of toys and R Systems International for acquisition of Indus Software Pvt Ltd, among others, were also recommended for clearances. Sources said the Union commerce and industry ministry has also cleared the cases.

 

But the proposal of Cabury Schweppes, which holds 51 per cent shareholding in Cadbury India Ltd, for acquiring the balance shares (49 per cent) in the latter through an open offer could not be taken up for consideration in the past meetings. The FIPB, in fact, could not meet after its last meeting on December 20 as the year came to a close. The next meeting of the board will, therefore, be held sometime in the first week of January, sources said.

Cadbury Scheweppes, which submitted its application on December 20, has proposed to acquire the balance 49 per cent of its subsidiary at an Rs 500 per share. The plan to ultimately convert the company into a wholly-owned subsidiary is part of the food and beverage major's global strategy to integrate its businesses in key markets. This is evidenced by its 100 per cent acquisition of Cadbury Schweppes (South Africa) Ltd in South Africa at the end of 2000.

The transaction, the company said, will provide opportunities for increasing Cadbury India Ltd's operations and value creation through closer integration of its business with global operations of the Cadbury Schweppes Group.

Sources said that Mico, in which the foreign equity is 56.99 per cent, had sought government approval to increase the foreign holding in the company to 60.55 per cent. The company has proposed to buy-back up to 200,000 equity shares of the company from the existing shareholder on proportionate basis through a tender offer. The buyback is being financed from out of the free reserves of the company at a Rs 2,500 a equity share and is expected to be completed within 12 months.

The foreign collaborator Robert Bosch, Germany, is, however, not willing to be part of the buy-back. Therefore, Robert Bosch's absolute holding in the equity share capital of Mico will remain unchanged at 1,940,626 equity shares of Rs 100 each. The percentage holding will stand increased from 56.99 per cent to 60.55 per cent.

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First Published: Dec 28 2001 | 12:00 AM IST

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