New Delhi, Feb 7: The swap ratio for the merger of Samtel Electron Deviceswith Samtel Color has been fixed at 10:17. The merger was approved by the board of directors of both companies on Friday.The merger of the Rs 64-crore Samtel Electron with the Rs 300-crore Samtel Color, which is subject to the approval of Delhi and Allahabad high courts and shareholders of both the companies, will be effective from April 1, 1997.Samtel Electron share price on Thursday was Rs 18.10 while Samtel Color was trading at Rs 10.40 on the National Stock Exchange. The valuation of the share exchange ratio was worked out by Y H Malegam of S B Billimoria and Co.The equity base of Samtel Color post-merger will go up to Rs 40 crore, from the existing level of Rs 24.48 crore. Samtel Electron Devices has an equity base of Rs 10.02 crore.
The merged entity is expected to close this financial year, ending March 1998, with turnover of Rs 550 crore and net profit of Rs 10 crore to Rs 12 crore, Samtel Color chairman and managingdirector Satish K Kaura said here at a press meet.
The promoters will have a 50 per cent stake in the merged entity while the rest 50 per cent would be held largely by the public. The financial institutions will have a small stake in the company. At present, the promoters have a 40 per cent stake in Samtel Color and a 67 per cent stake in Samtel Electron Devices.
Though the turnover of Samtel Electron is about one-fifth of Samtel Color, the merger ratio gives the former's shareholders 17 shares in Samtel Color for every 10 shares held due to high profitability of the company.
"The merger will reduce the cost of finance for Samtel. It will also create a company that is financially very strong and increase our ability to compete globally," Kaura stated. He added that the merger would reduce overheads, improve transparency in supplies of colour guns from Samtel Electron Devices to Samtel Color and create synergies that would reduce financial risks and improve the credit rating of the company.
Corning Incis in negotiations for a higher stake in Samcor Glass, its joint venture with Samtel group. Samtel group chairman Satish Kaura said on Friday that negotiations between the two companies are currently underway.
Samcor Glass is a 50:50 joint venture between Corning and Samtel group, set up in 1993.Kaura added that Samcor Glass was in the process of finalising the colour glass parts project.In the first year of production, the facility would manufacture funnels for the colour picture tube. In the second year, the company would begin production of panels.
Samcor manufactures glass parts for black and white picture tubes at a facility in Kota, Rajasthan. The facility has the capacity to manufacture 5.5 million sets of panels and funnels for the black and white television.
Once the colour glass facility is on-stream, Samtel would become the second largest manufacturer of these parts in the country after Videocon. Incidentally, Videocon has also embarked on an expansion programme. Kaura added that the Samtelcolour company is also considering manufacture of 29-inch picture tubes.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
