New Delhi, May 5: Hinditron Informatics has decided to reduce its equity base from Rs 12 crore to Rs 3 crore by pruning the face value of its share from Rs 10 to Rs 2.5. The shareholders will be asked to surrender the existing share certificates and the company will issue fresh certificates of Rs 10 each for every four fully paid-up shares of Rs 2.50.An extraordinary general meeting will be held on May 29 to seek the shareholders' approval for the same. The approval from the Mumbai high court is also awaited. Although Hinditron's shareholders stand to lose in the short term as they will hold fewer equity shares than before, company officials say that in the long run it will be beneficial as the reduction in equity will result in a positive net worth.
The equity reduction will be preceded by an issue of 5.5 crore equity shares in favour of the promoters on a preferential basis at Rs 10 per share.
Post-issue, the paid-up capital of the company will swell from Rs 6.5 crore to Rs 12 crore. The promoters'stake will also go up from 52 per cent to 75 per cent.
The preferential issue will not result in any inflow of money as the promoters are converting their loans to the tune of Rs 5.5 crore into equity. The company has been incurring losses during the past few years mainly on account of its unrelated diversifications (marketing of medical equipment and computer graphics).
Till March 31, 1997, the company had a cumulative loss of around Rs 8.23 crore. Says a senior company official: "As part of a rationalisation process, the company has already closed its medical division and curtailed the activities of the computer graphics division. This will enable us to focus on our core competency business of software engineering process business."
The benefits of the restructuring exercise will accrue to Hinditron in fiscal 1998-99 and may help the company earn a profit. The illiquid scrip has started trading regularly now.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
