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June 12, 2001
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Money > Business Headlines > Report June 12, 2001 |
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ITC to block BAT's VST bidBS Corporate Bureau The management of ITC Ltd will not give a no-objection certificate to British American Tobacco Plc for increasing its stake in VST Industries . As BAT holds an equity stake in ITC, it would require the consent of ITC for any such move. "The government policy clearly says that no fresh foreign investment will be allowed in the tobacco sector. We are unlikely to provide a no-objection certificate to BAT if they want to increase their stake in VST Industries," top sources in ITC said. The ITC decision comes close on the heels of reports that BAT may make a fresh proposal to the Foreign Investment Promotion Board for increasing its stake in VST after the Andhra Pradesh high court imposed a stay order on fresh acquisition of VST shares. While Russell Credit had offered Rs 125 per share, Bright Star upped its offer price to Rs 151 on June 3. BAT had backed the ITC subsidiary's offer. At present, BAT holds a 32.16 per cent stake in VST Industries through its subsidiaries Raleigh Investment Company and Tobacco Manufacturing Company. BAT had earlier tried to increase its stake in VST Industries through a rights issue which was rejected by the FIPB. Earlier, the government had cleared one investment proposal-a 50:50 joint venture between RJ Reynolds and Delhi-based businessman Mahendra Kumar Modi. ITC has opposed foreign investment in the tobacco sector on the grounds that the sector is highly regulated and multinationals may use the country as a dumping ground for cigarettes. Powered by YOU MAY ALSO WANT TO READ:
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