Financial Daily from THE HINDU group of publications
Friday, Aug 02, 2002
Financial Daily from THE HINDU group of publications Friday, Aug 02, 2002 |
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Corporate
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Bonus Announcements Marico proposes bonus pref shares Our Bureau
Mr Milind Sarwate, Chief Financial Officer, Marico Industries
MUMBAI, Aug 1 MARICO Industries Ltd's board has proposed an issue of bonus redeemable preference shares of Rs 29 crore in the ratio of one fully paid-up preference share of face value of Rs 10 for every one equity share held in the company. The redeemable preference shares will carry a dividend of 8 per cent per annum. The redemption of these shares will be possible in one or two tranches not later than October 1, 2005. The issue will largely be in demat form. The shares are likely to be listed on the Bombay Stock Exchange and National Stock Exchange. The company's board has also declared a first interim dividend of 15 per cent for the year 2002-2003. As the company has completed its investments in new capacities and has no capital expenditure plans, Marico feels it is not prudent to defer distribution to shareholders, Mr Milind Sarwate, Chief Financial Officer, Marico Industries Ltd, said. For the company, this route provides flexibility through a deferred payment through a quasi-debt instrument. "It provides a bridge over time and the company can plan the outflow,'' Mr Sarwate said. The company's return on equity is expected to improve. Unlike the share buyback programme, this instrument provides for equitable distribution across all categories of shareholders, Mr Sarwate said. Among the various facilitators for sale of these shares, Marico has identified HDFC Bank, which is a consortium banker to the company. "Marico has been sharing its profits and enhancing shareholder value through innovation in the quantum, range and versatility of the instruments of distribution to shareholders. The current distribution of Rs 31.2 crore comprising the preference shares and interim dividend is an expression of this philosophy,'' the company said in a press release. The company said the bonus preference shares would be allotted after the issue is approved at the extraordinary general meeting slated for August 26.
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