MUMBAI,July 3: Apollo Tyres, the Raunaq Singh-controlled tyre major, has chalked out plans to mop up debts worth Rs 50 crore to fund share buy-back, so as to take the plunge as soon as the provision is introduced. The tyre company also proposes to introduce an innovative stock option scheme tailored for permanent employees, including working directors.The scheme, which will leave out the promoter-directors, will involve fresh issue of shares or convertible debentures and hike the paid-up equity base of the company by a maximum of 5 per cent.Apollo Tyres is gearing up to buy back shares to take advantage of a proposed amendment in the Companies Act. The company will seek the shareholders approval for the fund mop-up to finance a share buy back at its annual general meeting (AGM) on July 22.Besides market purchases, the company proposes to buy back shares from its shareholders, and will also target employees who have earlier been offered shares.A resolution in this regard, which is subject toshareholders' approval, authorises the board of directors to raise funds amounting to Rs 50 crore, in one or more tranches, through issue or private placement of debentures/bonds for the purpose of buyback of shares.Besides, in an effort to retain its human resource pool, the company has proposed the introduction of an employee stock option scheme, which will target permanent employees, especially its top-notch professionals including employee-directors.At the AGM later this month, shareholders will ratify a resolution authorising the issue of equity shares, convertible debentures (fully or partly paid), or non-convertible debentures. The resolution proposes induction of fresh equity by a maximum of 5 per cent of the company's paid-up capital. Apollo Tyres' equity base at present stands at Rs 30 crore.The scheme will be available to employees who are in regular and permanent employment of the company, but will exclude promoters who are engaged as directors of the company. The option will alsobe offered to a trust, mutual fund, or mutual fund special scheme for employees, or any other entity, as the board may deem fit, which may be created or existing for the benefit of such persons under the stock option scheme."The issue price and premium payable will be determined by the company's board of directors in accordance with guidelines issued by the Securities & Exchange Board of India."The new shares will be entitled to for dividend on a pro-rata basis from the date of allotment and shall rank pari-passu with existing shares of the company.Meanwhile, Apollo Tyres has also decided to raise Rs 90 crore through issue of 40 lakh partly convertible debentures (PCDs) to the promoters on a preferential allotment basis. The PCDs, with a face value of Rs 225 each, will be issued to promoter Raunaq Singh and his family/associates, Onkar Singh along with family
