The board of paints and chemicals maker ICI India Ltd will meet on 26 May to consider a revised share buyback proposal, as the earlier plan did not attract any shareholder interest.
The company said its board will consider buyback of shares at up to Rs575 a share, compared with its ongoing buyback at up to Rs350 a share. “The earlier price became defunct, as the share price moved much ahead of that level,” company secretary R. Guha said on Thursday. “We are revising the (buyback) price for shareholders. We will also revise the total amount available to shareholders.”
According to the earlier proposal, approved in July 2006, ICI India planned to utilize Rs125 crore of its cash surplus for the buyback, and another Rs20 crore for capacity augmentation and to support sales growth. Since then, the company’s cash reserves have swelled through the sale of its advanced refinish business to Asian PPG Industries for Rs52 crore, and that of its flavour and food ingredients business, Quest India, to the Givaudan group for nearly Rs390 crore.
“We have cash surplus of nearly Rs800 crore available at this point,” Guha said. “We will not be utilizing all of that. It is an exceptional profit, so we want to share it with shareholders.”