8th February 2006: There are some conditions to be fulfilled before the FSS stake sale takes place. FSS has to be delisted from the BSE and NSE before the stake sale and as part of this, trading in the scrip has already been suspended. The company’s shares last traded on February 2.
“The paper work for completing the delisting is on and Flextronics will be delisted on February 10,” said sources. In October ’04, Flextronics completed the acquisition of a 70% stake in FSS.
In May ’05, Flextronics had proposed delisting FSS from Indian bourses by purchasing all its remaining publicly-held shares. In December ’05, Flextronics increased its stake in FSS through purchase from the open market. It now has around 94% in FSS and has opted for delisting.
Earlier, a number of other bidders, a mix of private equity and strategic investors, were interested in buying a stake in FSS. However, KKR is the only one to have made the offer till now.
Industry sources said Flextronics, an electronics manufacturing services provider, is planning to refocus on its manufacturing business.
Michael McNamara, the new CEO of Flextronics, is reportedly not keen on continuing with non-core businesses. “The company’s software clients are also not too happy with Flextronics coming into the software sector, posing competition,” the sources added. Some of Flextronics clients include Dell, Microsoft, Hewlett-Packard and Xerox.
Meanwhile, KKR is bullish on the Asian technology sector. It recently opened offices in Hong Kong and Tokyo and is focusing on building a premier technology portfolio in the private equity business.