Financial Daily from THE HINDU group of publications
Wednesday, Jun 01, 2005
Financial Daily from THE HINDU group of publications Wednesday, Jun 01, 2005 |
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Corporate
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Mergers & Acquisitions Tata Chem to reconsider bid offer for Egyptian Fertiliser Our Bureau
Mr Prasad Menon, Managing Director, Tata Chemicals, and Mr Komi Khusrokhan, Executive Director, at a press conference in Mumbai on Tuesday. - Vivek Bendre
Mumbai , May 31 TATA Chemicals Ltd, which saw its open offer for the Egyptian Fertiliser Company (EFC) made through wholly owned subsidiary Homefield International Pvt Ltd bettered by a counter bid, will consider revising its original offer, senior officials said on Tuesday. Last Wednesday, Tata Chemicals (TCL) informed of its $450-million (Rs 2,000 crore) bid to acquire control of EFC, a new free trade zone manufacturer of urea and ammonia. Private parties held 54 per cent and the public (banks and insurance companies) had 46 per cent in EFC. If successful, the bid would have added 6,50,000 tonnes of urea and 4,00,000 tonnes of ammonia to TCL's portfolio, besides giving the Indian manufacturer a toehold in a gas-rich region. At a press briefing, Mr Prasad Menon, Managing Director, TCL, said a counter offer at $350 per share (TCL's offer was $305) had been tabled by a West Asia player, leaving the Indian company time till Tuesday to better it. Should a third offer also be made, then the conclusion of the process would be stretched by another seven days. "We are weighing our options," Mr Menon said. On what extent TCL will persist with the offer, he said, "There will be a limit beyond which we will not go." Going by the 1.475 million shares of EFC, mentioned in TCL's statement on the bid last week, the second offer will be worth $516.25 million. EFC is in the process of doubling capacity. Further, as fertiliser manufacturers race to secure raw material supply and locate capacities in gas-rich geographies, players from North America, West Asia and China have been active in such bids. TCL will use the entire $150 million from its FCCB issue, backed by internal accruals and bridge loans (already arranged), to fund its bid; the bridge loans are likely to be converted later into a bond issue, Mr P.K. Ghose, Chief Financial Officer, said. Sharp rise in Q4 profit In its FY05 results, TCL reported a 274.80-per cent increase in Q4 PAT to Rs 111.13 crore (Rs 29.65 crore for the year-ago period) on net sales/income from operations of Rs 719.56 crore (Rs 565.16 crore). The sharp rise in PAT was attributed in part to restatement of deferred tax liability as a consequence of reduced tax rate. For 2004-05, its PAT was up 54.42 per cent to Rs 340.55 crore (Rs 220.53 crore) on net sales/income from operations of Rs 3,008.14 crore (Rs 2,544.15 crore). The board has recommended a dividend of Rs 6.50 per share entailing an outgo of Rs 158.09 crore including dividend tax.
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