Ranbaxy Laboratories promoter Parvinder Singhs stake in the company will dip by 2.6 per cent this year after the merger of Croslands Laboratories and will rise again to the current level after a round of warrant conversions by December 1998.
Now at 38 per cent, Singhs stake will drop to 35.4 per cent after the merger proposal of Croslands is cleared by the high courts and shareholders. The merger has been approved by the boards of both companies.
In December 1993, Ranbaxy issued 85,000 warrants to the management group which were to be converted into 25 shares each at Rs 175 per share. These warrants have a two-year window and are due for conversion between December 96 and December 98.
When converted, they will add Rs 2.125 crore to the post- merger Rs 51.39-crore share capital of the company. This will also result in the Ranbaxy promoters stake being hiked to 37.96 per cent.
Meanwhile, the stake of Croslands promoters will be 3.2 per cent in the merged company.
The Ranbaxy management had in December 96 exercised the option attached to an earlier batch of warrants for their conversion into 50 lakh shares, increasing their stake from 30 per cent to 38 per cent.
The 6,50,000 warrants issued to Ranbaxy employees on December 14, 1995, are not likely to affect the share capital or the promoters stake in the company because none of the employees have taken them up so far and they will in all probability lapse when due for conversion in June, 97.
The warrants are to be converted into equity shares at a premium determined in accordance with the Sebi pricing formula.
According to a senior Ranbaxy official, the warrants are unattractive for company employees as the high premium makes it cheaper to buy shares from the market.
Ranbaxy sources said that when they had determined the price at which the warrants would be converted two to three months back, it worked out to around ten to fifteen per cent higher than the prevailing market price of the share.
