Management of Bosch has declared an indefinite lockout of all workmen from the plant operations at its Jaipur plant with effect from 12 December, 2008.
The plant has around 1,200 employees and manufactures pumps for use in the tractor and commercial vehicle (CV) segment.
The company has taken the decision as a result of workmen not reporting for work and continuing their illegal and unlawful strike, even after it was termed illegal and prohibited by the Government of Rajasthan.
The company’s Labour Union has been on an indefinite strike at the Jaipur plant since 10 November causing Revenue loss to the company.
According to company sources, the loss is estimated to be in the range of Rs100 crore in the initial four weeks of the strike. However, the company said it will continue the production with the help of the management staff.
The company has also announced its intention to buy-back its fully paid-up equity shares of face value of Rs10 each from its existing shareholders through the open market. In the event equity shares are bought at an average price of less than Rs4,500 per equity share, the maximum offer size of Rs639.2 crore may not be exhausted.
The company proposes to buy back a maximum of 21,44,490 Equity Shares such that the increase in promoter shareholding does not exceed 5% of the paid-up share capital (i.e. up to 74.7%) pursuant to this buyback offer.
Date of commencement of the buyback offer is December 15, 2008. We maintain a BUY on the stock, with a target price of Rs4,336.