Depressed Shares Spurred Bids, Says Vst Chairman

VST Industries chairman Abhijit Basu today felt that depressed conditions in the stock markets, particularly for the so-called cash shares, had created circumstances favouring a takeover bid on the company. "Despite the turnaround in the fortunes of the company, its share price failed to recover," he said.

Addressing shareholders at the 70th annual general meeting (AGM) held here, Basu said the Calcutta high court had passed an order that the transfer of shares pertaining to the open offers would be subject to its decision on the petition.

He was referring to the public interest litigation filed by an individual against the Russel Credit offer in the Calcutta high court on May 21.

Further hearings in this case will commence on June 27. Basu has also mentioned about the interim stay order given by the Andhra Pradesh high court and Bright Star's willingness to extend the offer date depending on the court decision.

Given the situation, "there is a measure of uncertainty as to when the transactions will be completed," Basu said and refused to make further comments on the issue as the matter is sub judice.

On the operations front, Basu said that the company was planning investments in plant and machinery and further steps to improve productivity.

This year the company is planning to spend Rs 8.59 crore for modernising the packing machinery. On the failure of Kingston and Charms Blue brands, he said, "It's a tragedy and I hope we will succeed next time."

Replying to a shareholder's request to revalue the assets of the company, he assured to examine the issue and expressed the view that it may not be very exciting in terms of getting a higher valuation for its assets.

On the performance, he said it is unlikely that gross profit margin would go upto any significant extent from the present five per cent given the competition in the industry.

On the introduction of new brands, he replied that "I don't think we're robust enough to introduce a new brand at this moment which requires an advertisement budget of Rs 15 crore."