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CHENNAI, Jan. 25

THE board of Parry Agro Industries Ltd, part of the Murugappa group, has decided to buy back 8.67 lakh shares representing 23.09 per cent of the equity share capital, according to information provided by the company to stock exchanges.

This follows the shareholders' approval through postal ballot announced at the extraordinary general meeting held today. The shareholders have also approved an enabling resolution to delist the company, according to company officials.

The shareholders have approved the proposal to buy back up to 8,67,472 fully paid-up equity shares of Rs 10 each representing 23.09 per cent of the equity share capital at a maximum price of Rs 70. The board has confirmed the buyback price of Rs 70 per share, according to the company.

When contacted by Business Line, company officials said that the buyback provides the minority shareholders an exit opportunity at a premium of about 40 - 70 per cent over the share price during the last few months prior to the announcement. The prices had reflected the slump in the plantation sector, a core area of activity for Parry Agro.

The company's algal division produces dunaliella salina, an alga which is a major source of nutritional supplement. The Murugappa group has with it two nutritional supplement product lines based on the micro algae spirulina and dunaliella.

The spirulina culture facility is with New Ambadi Estates, another company in the group. The culture facilities are located at Pudukottai district, Tamil Nadu and were set up at a total cost of about Rs 14 crore.

The company sees algae-based nutritional supplement as a major growth area. It may be recalled that last year the Parry Agro board approved in-principle a proposal to hive off the algal division to a separate company, Parry Nutraceuticals.

At that time, both the algal divisions were to be brought under a single company to achieve synergies of operation. The decision is yet to be implemented because the company is looking at ways to take the idea forward. The new product will call for large investments including in concept promotion and marketing, officials said.

Parry Nutraceuticals is a marketing company that currently purchases spirulina powder and dunaliella oil, and processes and markets them.

For the quarter ended December 31, 2001, Parry Agro has reported a net loss of Rs 57 lakh on a sales of Rs 20.77 crore. During the same period the previous year, the company reported a net loss of Rs 2 crore on a sales of Rs 21.39 crore.

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