BPL to raise capital via European arm

Bangalore: After the government barred BPL from accessing the capital market for a period of three years on account of its involvement in share price rigging, the company is thinking of using its London-based subsidiary, BPL Eurotrade, as a means of raising finance for capital expenditure plans in the future.

Confirming this BPL CMD Ajit Nambiar said there is a likelihood of the capital coming from London. Eurotrade functions as the central procurement hub of BPL's manufacturing companies and as a catalyst for colour television (CTV) exports. There is a lot of commonality in the requirements of the companys different manufacturing units and, therefore, BPL Eurotrade could leverage on significant business opportunities, in excess of Rs 1,500 crore, he said.
BPL feels its London arm will enhance its negotiating power with international suppliers, which is important, as the consumer durable industry will remain procurement-intensive. Nambiar says procuring components at lower prices would be important even with duties coming down from 20 per cent to 10 per cent and below in the coming years.

BPL Eurotrade has already achieved breakthroughs with large buying chains such as Dixons and Tesco and is working closely with CTV manufacturers such as Sharp, Sanyo, Vityaz for meeting the picture-tube needs of these manufacturers for their European and Russian markets.

Recently, the Indian government prohibited BPL, Videocon International and Sterlite Industries from accessing the capital market for a period of four, three and two years respectively on account of their involvement in share price manipulations in connivance with Harshad Mehta, who was debarred for life.

BPL, Videocon and Sterlite were among the 25 companies been found guilty of indulging in irregularities on the stock exchange such as share price manipulation and takeover code.