BSES to slash exposure in nine subsidiary firms to 30-35%

Nisha Das
11 April 2003

Mumbai: BSES will drastically reduce its exposure in nine subsidiary companies to around 30-35 per cent once the proposed subsidiary restructuring process is over. As per the current plan, the parent company will transfer the remaining stakes in the subsidiaries to companies such as BSES Holding and BSES Infrastructure.

With a view to avoid a hit on the BSES balance sheet on account of the compulsory consolidation of the balance sheets of subsidiaries, BSES recently decided to restructure its holdings in its loss-making subsidiaries. Also, any hit on the BSES balance sheet will reflect on Reliance''s balance sheet, since it holds around 58 per cent stake in BSES.

Says a BSES spokesperson: "De-subsidiarisation of certain companies is part of an internal restructuring exercise, which has been under consideration of the board of directors and has only been implemented now. There is no change as concerns the BSES group''s hold over those companies which have ceased to be subsidiaries of BSES."

He said it is very premature to say anything about the parent company''s holding in subsidiaries. But sources close to the developments say currently, the BSES board is considering to keep only 30-to-35-per cent stake in the subsidiaries, while the remaining will be transferred to other group companies.

Industry analysts say the BSES move was on the cards, and would in all probability leave a positive impact on the Mumbai-based power utility. "This will help BSES get rid of the financial burden of the loss-making subsidiaries."

Meanwhile, the Securities and Exchange Board of India (SEBI), in a statement issued here, said the market watchdog has granted exemption to Reliance Capital, complying with the provision of chapter III of the SEBI regulations for the proposed acquisition of 78,00,000 equity shares constituting 5.66 per cent of the equity capital of BSES.