TVS Finance to be delisted after share buyback

Expressing their inability to bring public holding in TVS Finance to at least 25 per cent, promoters of the company today proposed to buy back all its outstanding equity shares and delist it from bourses.

In a public announcement outlining the delisting offer, TVS Investments, a wholly-owned subsidiary of auto parts maker Sundaram Clayton Limited, proposed to buy about 42.34 lakh shares of TVS Finance and Services Ltd being held by public shareholders at a floor price of Rs 20.29 per share.

The public shareholding accounts for 10.23 per cent of the company's total equity capital. The shares of TVS Finance were trading at Rs 22.55, down 1.96 per cent on the Bombay Stock Exchange today.

Pursuant to the buying, the parent company TVS Investments seeks to delist the shares of TVS Finance from the BSE and the Madras Stock Exchange where the company shares are listed, it said in public announcement.

TVS Investments holds 50.01 per cent equity in TVS Finance, while other promoters TVS Motor Company and Anusha Investment own another 39.76 per cent.

While disclosing an accumulated losses of about Rs 99 crore as on December 31, 2007, the announcement said that the current financial position of the company requires "to strengthen the net owned funds position and increase the long term funds position."

The company said that the stock market listing norms require it to have a public holding of 25 per cent and the BSE has also sought the company's action in this regard.

"Therefore, further issue of shares to the promoter companies cannot be made as it would directly result in further diluting the public shareholding, whereas the company is required to increase the public shareholding to remain eligible for listing," it said.

The proposed buyout and delisting of TVS is being made in lieu of the accumulated losses made by TVS Finance, said the company.

The decision for proposed buying of shares and then delisting was taken after the approval of the shareholders through a special resolution passed at the extraordinary general meeting of the company on March 7, the company said.