Datamatics Global share price hits upper circuit after board approves selling entire stake in CIGNEX US
The Board of Directors of the company approved to dispose off the entire stake which is indirectly held by the Company in its step down and material foreign subsidiary, namely CIGNEX Datamatics, Inc.
November 24, 2020 / 02:47 PM IST
Datamatics Global Services share price hit 10 percent upper circuit after the Board of Directors of the company approved to sell its entire holding in CIGNEX US.
The Board of Directors of Datamatics Global Services Limited at its meeting held on November 24, 2020, approved, to dispose off the entire stake which is indirectly held by the Company in its step down and material foreign subsidiary, namely CIGNEX Datamatics, Inc., the company said in an exchange filing.
The stake will be disposed off by way of divestment through stock redemption agreement entered into by and between Cignex US and Datamatics Global Technologies Limited, Mauritius, subject to approval of the shareholders and all concerned statutory and regulatory authorities, as may be necessary, the company added.
The proposed divestment will be effected through a stock redemption agreement, under which Cignex will buy-back the entire 62.51 percent stake held by DGTL in Cignex for an aggregate price of USD 16.57 million of which USD 7.97 million will be paid upfront to DGTL. The balance amount will be paid-out within the next three years.
The stock was trading at Rs 80, up Rs 6.40, or 8.70 percent at 14:05 hours. It has touched an intraday high of Rs 80.95 and an intraday low of Rs 72.45.
"We have worked on the structure and commercial terms to arrive at the proposed arrangement. This is an all cash deal and we are confident that it is beneficial for our Company and its shareholders. It will free up the management bandwidth, bring a sharper focus, and provide funds to invest in our digital solution strategy which is central to the business," said Rahul Kanodia, CEO and Vice-Chairman, Datamatics.