New Delhi, Mar 30: The Gujarat-based Ambuja group is planning to amalgamate three companies within its fold. Gujarat Ambuja Cotspin, Gujarat Ambuja Export amd Gujarat Ambuja Proteins are to be amalgamated into one entity to bring down their huge equity capital. Says a senior official of the company, ``Together, these companies have an equity base of around Rs 130.5 crore which is becoming increasingly difficult to service. This is being reflected in the depressed stock prices of these companies.'' All the three companies are quoting below par on the Mumbai Stock Exchange.Officials say the amalgamation proposal is at a very preliminary stage and the details are still being thrashed out. ``The proposal has been mooted by our chairman, Vinay Kumar Gupta, and we are deliberating on the finer aspects like the ratio and the scope of the new entity. After the details are worked out, the proposal will be submitted to the Board of Directors and then we will seek shareholders' approval.''
Officials refused todivulge the basis on which the ratio will be determined on the grounds that the proposal was at a very preliminary stage. They also did not disclose the proposed equity of the new entity, but say it will benefit the shareholders. The officials also refused to be drawn into an arguement whether the amalgamation proposal was taken because of the delay in amending the Companies Act to allow share buyback by companies.
It may be recalled that Gujarat Ambuja Cotspin had floated a proposal to buyback around 25 per cent of its equity once the buyback was allowed.While Gujarat Ambuja Cotspin is a 100 per cent export oriented unit manufacturing yarn and indigo denim fabric, Gujarat Ambuja Proteins and Exports are in the edible oil and solvent extraction sector. Of the three, Gujarat Ambuja Cotspin has the largest equity of Rs 95 crore and the largest gross block of 126.07 crore. For the first-half ended September 1997, the company earned a net profit of Rs 3.57 crore on turnover of Rs 48.21 crore. For the fullyear, the company hopes to achieve a sales of Rs 140 crore, with exports contributing around Rs 100 crore.
Gujarat Ambuja Cotspin's paid-up capital has grown by leaps and bounds since 1992-93 when it was Rs 7.69 crore. The follwing year, the equity rose to Rs 13.44 crore and then to a whopping Rs 88.55 crore.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
