Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday

Need to Know | Emami buys 24% of Zandu, eyes 20% more

Need to Know | Emami buys 24% of Zandu, eyes 20% more
Comment E-mail Print Share
First Published: Sat, May 31 2008. 12 57 AM IST
Updated: Sat, May 31 2008. 12 57 AM IST
Kolkata: City-based coglomerate Emami Ltd, that has business interests ranging from real estate to fast moving consurmer goods, said on Friday it had bought 24% stake from one of the promoters of Zandu Pharmaceuticals Works Ltd, a Rs150 crore herbal health-care firm by sales, for an undisclosed sum.
The buyout raises Emami’s stake in Zandu to 27.5%. The company, which bought 3.75% of Zandu’s shares from the market over the past 10 months, would make an open offer to acquire an additional 20% within a few days, Emami said in a statement.
Emami’s chairman R.S. Agarwal told Mint that his company had spent around Rs160 crore so far to acquire the stake. “The open offer is likely to be priced between Rs7,300 and Rs7,500 a share,” he added.
Zandu’s shares jumped 16% to Rs8,132.80 on the National Stock Exchange, or NSE, on Friday, while the bourse’s key S&P CNX Nifty index was up 0.7%. Emami’s shares were up 9% at Rs317.65 on NSE.
Emami’s director Harsh Agarwal said, “We have bought over the 24% stake of the Vaidya family. We don’t know yet what the other promoter group—the Parikhs—are going to do with their stake, which we understand is around 20%.” Emami, he said, hadn’t approached the Parikhs yet with an offer to buy their stake. Asked about the open offer price, Harsh Agarwal said it wasn’t decided yet, but was likely to be slightly less than the price paid to the Vaidyas because it included a non-compete fee.
Although Emami said in a statement that its intention was to be a “strategic investor” in Zandu with representation on its board, chairman Agarwal said the deal could eventually lead to a “takeover of the company.”
Explaining its interest in Zandu, Emami said in a statement, “Zandu has tremendous business potential. Emami with its strong marketing acumen can help Zandu reap its true potential.”
Meanwhile, Emami’s board has decided to allot up to 15% of the company’s shares to financial institutions, providing to raise over Rs300 crore. “It’s enabling resolution... we aren’t planning to sell shares immediately,” Harsh Agarwal said.
- Aveek Datta
Sujana Metal plans Rs800 cr expansion
Hyderabad: Secondary steel company Sujana Metal Products Ltd, or SMPL, has chalked out an expansion plan involving an investment of Rs800 crore to be spent by June 2010, group chairman Y.S. Chowdary said.
The Hyderabad-based company plans to spend Rs370 crore on two greenfield projects—a Rs200 crore billets unit near Chennai and a Rs170 crore sponge iron facility at Suryapet near Hyderabad.
Sujana Metal, which has acquired three steel units at Visakhapatnam, Hyderabad and Chennai for Rs180 crore, proposes to spend Rs100 crore on modernizing its existing units and around Rs150 crore towards working capital requirements.
Chowdary said the company proposes to raise Rs230 crore through issue of convertible warrants, Rs470 crore as term loans and Rs100 crore from internal accruals. The company currently has a capacity of about 728,000 tonne per annum and aims to achieve a capacity of 1 million tonne by June 2010.
- C. R. Sukumar
Reduced 2% Central sales tax from 1 June
New Delhi: The reduced Central sales tax (CST) rate of 2% on inter-state sale of goods, compared with 3% earlier, comes into effect from 1 June, the finance ministry said in a notification. Finance minister P. Chidambaram had announced in his budget speech to Parliament in February that the CST rate would be reduced to 2% from April 1. This was delayed as the states and the centre were not able to reach an agreement earlier on the formula to compensate the states for the revenue loss.
It has now been agreed that the compensation for revenue loss to the states in a year will be limited to the proportionate loss based on the actual collection of CST in that year.
The lower rate of 2% CST will now be applied to inter-state sale of goods to registered dealers (against form-C) along with the value-added tax rate or state sales tax.
The reduction forms a part of the roadmap for phasing out CST completely by 31 March, 2010.
- Staff writer
Comment E-mail Print Share
First Published: Sat, May 31 2008. 12 57 AM IST