Thomas G. Bata in Calcutta on Friday. Picture by Kishor Roy Chowdhury

Calcutta, April 16: Bata India Ltd, a subsidiary of Toronto-based Bata Shoe Organisation (BSO), may consider a rights issue to part-finance its future investment plans.

The company plans to develop a township at Batanagar, modernise its factories and put in place the integrated retail management system in partnership with Infosys.

Bata needs an investment of $3 million to set up new stores and upgrade the existing ones during the current fiscal (calendar year 2004).

BSO had approved the investment in December, which would be met through internal accruals, said Constantin Salameh, senior vice-president and chief financial officer of the Bata group.

“For future investments, we may consider a rights issue if we fail to get funds from other sources (banks). Secondly, if the company turns around in 2004, the parent might consider a rights issue keeping the future returns of shareholders in mind. I am here to evaluate the overall performance of the company and if necessary we might put the rights issue proposal before the BSO board,” he added.

BSO had increased its stake in the Sri Lankan subsidiary through a rights issue. “We are doing the same for another subsidiary in Asia,” Salameh said.

BSO may also waive the trademark fee of Rs 12 crore which it takes from its Indian subsidiary so as to help the latter get back into the profit mode.

Earlier, BSO chairman Thomas G. Bata said the company plans to develop commercial and residential buildings at Batanagar in a joint venture with real estate firm Calcutta Metropolitan Group.

Christened as the ‘Batanagar redevelopment project’, it will offer quality healthcare, education, sport, recreation and housing facilities.

“Apart from these, the project will generate employment opportunities and also attract substantial outside investment for such infrastructure development work,” said Bata.

The project will come up on 264 acres at Batanagar. The company owns about 303 acres at Batanagar.

“We would like to provide quality living for our employees at Batanagar. They will enjoy this facility at the same rate of licence fee they are paying now,” Stepen J Davies, managing director of Bata, said.

Bata said the Indian subsidiary has undertaken modernisation of its retail network and the introduction of new categories of footwear.

BSO’s multi-million dollar investment in integrated retail management will be piloted in France this summer with a world-wide rollout schedule starting in the fourth quarter of 2004.