AP weighs options on Paper Mills selloff

The state holds a 25.36 per cent stake in the company, with the Kolkata-based Bangurs, the private promoters, having a 44.36 per cent holding as of the end of the last financial year.

While the Bangurs are believed to be keen on acquiring the state government's stake as per the original promoters' agreement, the state is "exploring all ways in dealing with its stake".

Responding to a query at a press meet here on Friday, Deepak Kumar Panwar, the principal secretary of the state public enterprises department, made it clear that "so far we have not made any offer to anyone and the government has not taken any decision pending the finalisation of the strategy".

"We are exploring all options within the context of the promoters' agreement. We will firm up our strategy in the next 10 days and put it to the Cabinet sub-committee for a decision", he stated.

"The valuation work of the shares has been completed and, based on that, there will be a reserve price for the off-load," he added.

The development assumes significance in the view of the good performance of the company and its book value of Rs 154 per share as on March 31, 2003, as against the current market price of under Rs 90.

APPM, which has a paid-up capital of Rs 11.83 crore, recorded a net profit of Rs 19.27 crore on a sales of Rs 408 crore for the fiscal 2002-03.

Its 52-week high and low on the bourses stand at Rs 101 and Rs 36, respectively.

Even if the Bangurs acquire the state government's stake, they will be required to come out with a public offer as per the Securities and Exchange Board of India's takeover regulations.

As per the new regulations, if anybody who is already holding a 15 per cent or more stake in a company acquires another five per cent stake in a single financial year, the acquirer has to make a mandatory open offer to the public shareholders to acquire another 20 per cent.