Itcs Classic Bill At Rs 125 Cr

ITC stands to lose Rs 125 crore as interest on account of its infusing Rs 350 crore towards the ITC Classic-ICICI merger. This was communicated to shareholders by ITC chairman Y C Deveshwar at the extraordinary general meeting (EGM) of the tobacco major in Calcutta yesterday.

Observing that the company was doing better than ever, Deveshwar said, the Rs 350-crore burden will not break our backs. ITCs third quarter results are better than the growth rate registered in the first six months.

The company had registered a 67 per cent growth in profit after tax (PAT) in the first six months, he said.

Deveshwar defended ITCs role in the Classic-ICICI merger, which came under attack by shareholders who felt the better alternative would have been to merge Classic with ITC.

Deveshwar emphasised that ICICI was a premier financial institution and was capable of absorbing Classics liabilities. It has a lot of leverage to convert bad assets into good, he said.

Deveshwar pointed out that the amalgamation was a fair proposition although it means sacrifice from ITCs side.

Deveshwar also noted that, after the merger deal is successfully completed, ITC has to grapple with other problems such as ITC Global and the issue of the real estate owned by ITC Classic which was raised through borrowed money.

The value of the prime real estate is around Rs 260 crore.

ITC also has to address issues relating to the untangling of ownership and licences linked to the real estate.

Deveshwar also mentioned that ITC had a market capitalisation of Rs 15,000 crore this year, which is Rs 4,000 crore higher than last year.

At the EGM, all four resolutions were carried smoothly without any hitch. The resolution pertained to :

Infusion of Rs 350 crore by ITC to ITC Classic on the event of its merger with Industrial Credit & Investment Corporation of India (ICICI).

Appointment of Sahibzada Syed Habibur Rehman as a director and also as a wholetime director for a period of three years from November 21, 1997 to November 20, 2000.

Appointment of Anup Singh as a director and also as a wholetime director of the company from November 21, 1997 to November 20, 2000.

Variation in the terms of remuneration paid/payable to wholetime directors Y C Deveshwar, Saurabh Misra and Biswadev Mitter from October 1, 1997 and to N Sitaraman, erstwhile wholetime director from October 1, 1997 to November 8, 1997.