The buy back is to be done through a tender offer and open to all shareholders. The offer will be opened in the fourth week of June. The decision to buy back its shares was taken after a board meeting of the company held at Secunderabad on Monday. But this is to be ratified by the shareholders through an extra ordinary general meeting to be held on May 5.

It is learnt that in case the shares tendered exceed the total number of shares sought to be bought back, the buy back will be on a proportional basis. Ind Global Financial Trust Ltd has been appointed as managers to the buy back of shares.

CFL shares, according to the board, has low liquidity and the buy back offers a transparent and fairopportunity to the shareholders seeking liquidity, it is said.

The buy back is to be financed through internal cash generation. The price offered for the buy back of shares represents a premium of 50 per cent over the market price, it is said.

It may be recalled that CFL was promoted by EID Parry along with joint venture partners Cheveron Chemicals and IMC Global, both of US. Cheveron had a 14 per cent stake which was bought over by EID Parry in 1995. In December 1998 EID Parry also bought over the 18 per cent stake of IMC Global. These acquisitions had given EID Parry Ltd an overall equity stake of 52 per cent in CFL.