Samtel To Cut Equity Stake In Samcor Glass

Satish Kaura-promoted Samtel group, a leading player in the domestic colour picture tube and other electronic components segment, has decided to reduce its equity stake in Samcor Glass Ltd from the existing 50 per cent to a minority holding.

This follows a decision taken by the two partners in Samcor Glass - Samtel and US-based international glass major Corning Incorporated, each of which holds 50 per cent equity in the joint venture - to set up a new line for manufacturing colour glass shells in the country with exclusive investment from the US partner.

This was disclosed by Satish K Kaura, chairman of the Samtel group, after the boards of directors of the group flagship and colour picture tube manufacturer Samtel Color Ltd and electron gun maker Samtel Electron Devices Ltd approved the merger of the latter into the former.

The boards approved a share swap ratio of 17 shares of Samtel Color for every 10 shares of Samtel Electron Devices for the merger, which will be effective from April 01, 1997.

Post-merger, the equity capital of Samtel Color will rise from Rs 24.48 crore to Rs 40 crore, with a projected turnover of Rs 550 crore in 1998-99 against an estimated Rs 300 crore in 1997-98.

The promoter's stake in the post-merger scenario will rise from 40 per cent to 50 per cent in Samtel Color, while that of public and financial institutions will come down from 60 to 50 per cent. Kaura disclosed that Samtel Color's technology alliance with Japanese major Mitsubishi Electric for colour picture tubes is to end in March 1998.

While the company ceased royalty payments to Mistubishi in 1994, the 'quality improvement' tie-up would come to an end in March this year. "We will be a free bird thereafter" Kaura said.