Karnataka-based Bhoruka group company Bhuruka Gases Ltd (BGL) has said that it has received shareholders’ approval to buy back its shares at Rs41 per share. However, the final share purchase price will be decided by the Karnataka High Court.
“We cannot confirm the final share price. It will be decided by the Karnataka High Court. We are filing an application in the court and the process could take about one month,” said R Srinivasan, legal manager and compliance officer, BGL.
Bhuruka Gases, which delisted in November 2008 from the Bombay Stock Exchange, said that it has received shareholders’ approval for its proposal to buy back 100% shares in the company in its extraordinary general meeting (EGM) held on 24th December.
While BGL delisted to cut costs, minority shareholders were crying foul, looking at what they call the good future business prospects of the company.
Earlier, Shreyansh Sanghani, a minority shareholder in BGL, told Moneylife, “I am of the opinion that the promoters are using their majority shareholding to take away the ‘benefits of proposed prosperity’ of the company from the minority shareholders.”
According to media reports, BGL is planning to invest in overseas trading operations in coal and bio-diesel by next year, through Bhoruka Overseas Pte Ltd, its investment unit based in Singapore.
The company has not paid any dividend since 1995, citing losses due to increased competition and the rise in power costs. According to the director’s report, BGL did not make any dividend payout for the year ended 31 March 2009 due to its “long-term growth and huge funds requirement”.
In 1995, BGL was examined by the committee of the Board for Industrial and Financial Reconstruction (BIFR) due to continuing losses in power generation and increased competition.
The BIFR committee suggested that BGL reduce its share capital by reducing its face value per share from Rs10 to Rs2.50. The Government of India has also given the company concessions in power and tax instalments. The company also received an interest subsidy of 25%-30% from IDBI Ltd and ICICI Bank Ltd on outstanding amounts due since 1995. — Ravi Samalad