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Siemens defers buyback proposal

Mumbai, Dec. 5: The board of Siemens India Ltd has decided to defer its second buy-back programme.

Company officials declined to divulge reasons for the move, with the company issuing a terse statement to the stock exchanges on the issue. The development saw the Siemens scrip take a tumble on the bourses today. Shares of the company which opened at Rs 275.10 plummeted to a day’s low of Rs 262, later recovering to finish at Rs 273.95, a loss of 3 per cent over the previous close.

Last year the company announced a buyback programme at a price not exceeding Rs 250 per share at an aggregate amount of up to Rs 80.5 crore.

Its German parent Siemens AG then held a 51 per cent stake of the company’s equity. The remaining was held by financial institutions at over 21 per cent and the public and others held over 27 per cent.

The company recently announced that it had bought back 23.55 lakh equity shares through its first buyback programme at an average price of Rs 197.49 per share and that the stake of its parent has risen to 55 per cent.

Siemens had only recently announced its decision to divest a 26 per cent stake equivalent to 83.20 lakh shares in Siemens Metering Ltd., at Joka, West Bengal, for a total consideration of Rs 25 crore—as against an acquisition cost of Rs 22 crore.

This was part of a global portfolio optimisation programme, where the parent was selling several business activities, including the metering business, to a private equity house Kohlberg Kravis Roberts & Co. L.P. (KKR).

Under the terms of the agreement, the divested business activities will be owned by a new holding company called Demag Holding s.a.r.l. (Luxembourg) where KKR will hold 81 per cent and Siemens AG 19 per cent.

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