New Delhi, Sept. 5 (PTI): Electrolux Kelvinator said today it had not proposed delisting through a rights issue and was at present awaiting permission from the Securities and Exchange Board of India (Sebi) before approaching the Foreign Investment Promotion Board again.
The FIPB had rejected the company’s proposal for expansion of capital via a rights issue in June this year since this could have resulted in the Swedish white goods company getting delisted from the Indian bourses, sources said here.
However, when contacted, chief executive officer of Electrolux Kelvinator Ltd (EKL) Ram S. Ramasunder said, “There is no question of delisting, we have not sought permission from the FIPB with the intention of delisting the company from Indian stock exchanges. The rights issue has been proposed since the company needs money.” “If everybody subscribes to this issue, Electrolux AB will continue to hold 76 per cent stake in the Indian venture. Only if all parties do not subscribe to the issue can the promoter’s holding hypothetically rise to 90 per cent.”
Sources said while rejecting the proposal, the FIPB has left it to the company to submit a revised proposal in conformity with the stipulation for listing and objections raised by the market regulator.
They said the proposed rights issue would have raised promoter holding in EKL to 90.1 per cent from 75.96 per cent and FIPB took into consideration Sebi’s objection to EKL’s proposed delisting while rejecting the proposal. “We have spoken to Sebi and we hope the market watchdog will soon clear our proposal,” Ramasunder said.
Stating that it has incurred operational losses, EKL had said in its application to FIPB that it requires funds to meet capital expenditure; the company’s board of directors has already authorised it to make an issue of up to Rs 25 crore equity shares of face value Rs 10 to existing shareholders.