Kolkata/Mumbai: A day after he pipped at least two other suitors to acquire a 10% stake in Mangalore Chemicals and Fertilizers Ltd (MCF), Kolkata-based industrialist Saroj Kumar Poddar, chairman of the Adventz Group, said on Wednesday he was keen to take over the firm from Vijay Mallya’s UB Group.
Describing MCF as a “great strategic fit” for Adventz Group’s own farm inputs business, Poddar said he concluded the deal to buy 11 million shares from the UB Group’s lenders “within an hour” of the Bombay high court’s refusal to halt the share sale.
“I made sure that we moved faster than our competitors because I am convinced about the long-term prospects of the company (MCF),” Poddar said, adding that his group had so far spent around Rs.44 crore to buy the shares.
Though Poddar refused to name the other companies interested in buying a stake in MCF, he said at least two others were closely pursuing the opportunity.
MCF and the Adventz Group’s Zuari Agro Chemicals Ltd have plants in close vicinity and produce similar products, Poddar said, explaining why he was keen on taking over the firm.
In fiscal 2012, MCF made a net profit of Rs.69.1 crore on revenue of Rs.3,707.17 crore. Zuari Agro Chemicals is considerably bigger than its rival from the UB Group: on revenue of Rs.6,211.1 crore, it made a net profit of Rs.103.18 crore in fiscal 2012.
“Vijay is a friend,” Poddar said in an interview, referring to the UB Group chairman. “We are not going to launch a hostile bid for the company.” The Adventz Group will wait till Mallya agrees to a change in management control, he added.
Mallya told Mint he has checked with Poddar about the latest development.
“He is a family friend since my father’s time and will never do anything hostile against us,” Mallya said. “On the contrary, he will cooperate with us in every way. UB Group has a large enough stake to maintain control of MCF.”
The UB Group owned 30.44% of MCF at the end of December, according to regulatory filings. Tuesday’s share sale has pared the group’s stake to 20% or thereabouts.
SBI Capital Markets Ltd on Tuesday sold MCF shares on behalf of the UB Group’s lenders for around Rs.38.60 each. These shares were given by the UB Group as security for loans taken by its now grounded Kingfisher Airlines Ltd.
MCF is currently valued at Rs.504 crore as per its market price. The stock closed on BSE at Rs.42.65 on Wednesday, having gained around 60% in the past week. It rose 8.52% on Wednesday, while the benchmark Sensex fell 1.26%. Zuari Agro Chemicals advanced 2.68% to Rs.174.50.
Even if Tuesday’s deal does not immediately yield management control for Poddar, it made him the front runner for taking over the firm and pre-empted predators from taking advantage of the UB Group’s current financial woes.
Three years ago, Poddar tried to take over another competitor—Nagarjuna Fertilizers and Chemicals Ltd. By June 2011, he had acquired a stake of around 6.66% in the firm, valued at that time at Rs.90 crore. But the company went through a restructuring: the group’s unlisted firms were merged with it resulting in the promoters’ stake going up to 51% from 38% before consolidation of the businesses.
This thwarted Poddar’s move. He said on Wednesday that he was no longer interested in Nagarjuna Fertilizers, the promoters of the firm having now secured a controlling stake in it. “It does not make sense to pursue Nagarjuna any more, so we would look to sell our stake to the company’s promoters,” he said.
The promoters of HT Media Ltd, which publishes Mint, are closely related to Poddar.