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HTA quit media services business. Existing media employees to surrender shares

22-November-2002
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HTA quit media services business. Existing media employees to surrender shares

After the entry of WPP Marketing Communications Private Limited (WPPMC) early this year HTA has decided to formally quit media services business. Mike Khanna CEO HTA announced this, in an internal communiqué. According to communiqué HTA employees transferred to WPPMC would have surrender their existing HTA shares and would be offered shares in WPP MC in the ratio of 1:80.

The Board of HTA has recommended few guidelines to Board of WPP Marketing Communication Private Limited for the allocation of shares to the employees of HTA. According to the guidelines, HTA’s employees who currently handle the media business in HTA will be transferred to the Media Company. A number of these media employees also hold shares in HTA. Upon ceasing to be the employees of HTA, they will transfer their shares to other employees of HTA at a price to be decided by Board of HTA, from time to time.

The HTA employees on becoming employees of WPP Marketing Communication Private Limited will be offered shares of the Media Company. The ratio worked out by the Board is of 80 equity shares of Re. 1/ each to be allotted at par in WPP Marketing Communication Private Limited for every one share of Rs 10 each held in HTA. This is aimed to allow the media employees gain from the future valuation of the new Media Company. The media employees will have the option either to subscribe to or not to subscribe to such shares.

On the other hand HTA shares of transferred media employees will be offered to non-media employees of HTA on a pro rata basis to their current holding in HTA.

This offer has been of liking with majority employees of HTA but a fraction of employees who have been or are to be transferred to new media company are an unhappy lot. Mainly because of the fact that they would be losing on the equity of HTA shares, which according to sources has a market value Rs 1300/- for each share of Rs 10/-. Secondly they were all expecting another windfall in the near future by the way of 100% sale of share to UK parent company WPP.

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