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Saturday, Dec 04, 2021
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On The BATwagon

BAT explores the option of launching its international brands through VST

On The BATwagon
On The BATwagon
outlookindia.com
-0001-11-30T00:00:00+05:53

ITC has been frustrating BAT'S attempt to launch its international brands like 555, Benson & Hedges, Kent and Lucky Strike in India. Now BAT has opted for the Hyderabad-based VST to launch its global brands in the country. And the gameplan is interesting, to say the least. VST is floating a rights issue through the instrument of zero coupon fully-convertible debentures of Rs 135 each in the ratio of 36 debentures for every 100 equity shares to mop up around Rs 75 crore.

While the current market price for the VST scrip is hovering around Rs 85, the deliberate high pricing could discourage shareholders from picking up the shares. BAT has already applied to the government for permission to pick up the unsubscribed portion of the proposed issue. What BAT is apparently hoping for is that by picking up all the rights offers that are renounced by shareholders because of the high price, it will be able to raise its stake in VST from the present 32 per cent to 51 per cent. And launch its international brands through a company it has control over. Malcolm Fry, VST's chief executive, is already in London, supposedly working out the financial details to bring in resources to enhance the holdings.

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