Apollo Board Approves Share Buyback Proposal
The Apollo Tyres Board of Directors has given its approval for a buyback of equity shares, as allowed by India’s Companies Act. The March 19 decision paves the way for a buyback programme of up to Rs 1.222 billion (£16.48), around 10 per cent of the company’s paid up capital and free reserves as of March 31, 2008. The buyback will be for a minimum of 67,00,000 equity shares, and the maximum buyback price is Rs 25 per share, on a face value of Rs 1.
The buyback will be executed through the open market, says Apollo Tyres, and the company’s Board has appointed ICICI Securities as the merchant bankers for the programme. Apollo Tyres is submitting all documents relevant to a buyback proposal to the Securities and Exchange Board of India (SEBI) and will await the regulatory authority’s final approval before commencing.
Speaking on the Board’s decision, Onkar S Kanwar, chairman & managing director, Apollo Tyres Ltd, said, “This is an opportunity for us to enhance value for our shareholders. In the present day context, we feel that prevailing share quotes are under priced and do not reflect the true value of the company or the inherent strengths of Apollo Tyres, both for the short and the long term.”
The entire buyback process will commence once all regulatory approvals have been obtained, says Apollo, and will be completed within 12 months.