Hindustan Lever Ltd (HLL) has revised Esop (employees stock option plan) price downward by Rs 8.76 a share following the company's proposal to issue debenture bonus and special dividend.
The HLL stock, however, dipped further on the bourses taking sheen away from the scheme, at least partially.
The share closed today at Rs 181.55 on the National Stock Exchange, Rs 10 below the proposed price of the scheme for 2002.
The gap between the ruling market rate and the scheme was even sharper if the Esop price for 2001 was considered.
The proposed reduction in the Esop price followed the company's intention to offer debenture bonus of Rs 6 and special dividend of Rs 2.76 to shareholders for every share held by them.
The reduction in Esop price is proposed to be applicable for the managerial staff who were granted options for the year 2001 and 2002. The company declared that 24.75 lakh shares would be given to the managerial staff in 2001. The figure was 32.33 lakh for 2002.
According to the revision, the Esop price has been fixed at Rs 208.69 for 2001 and Rs 201.59 for 2002. However, the proposed revision is related to the clearance of the debenture bonus to the shareholders.
The company will place a resolution pertaining to the issue of debenture bonus of Rs 6 for every share before the shareholders on August 9.
The resolution, which is expected to be passed by the shareholders, proposes to issue debentures that would be redeemed 18 months after allotment.
HLL proposed to offer debenture bonus from the general reserve and special dividend from the profit and loss account balance of the company. On December 31, 2001, HLL had total reserve of Rs 2823.56 crore - comprising a capital reserve of Rs 274.20 crore, revenue reserve of Rs 1789.38 crore and profit and loss account balance of Rs 759.97 crore.
However, distribution of convertible debenture to the shareholders from the general reserve did not indicate that the company would not grow through acquisitions, if needed.
The company has decided not to reduce share capital--neither through reduction of face value of shares nor buyback of shares.
