India Cements Ltd has offered Rs 75 per share to Industrial Finance Corporation of India (IFCI) to buy out its entire holding in Sri Vishnu Cement Ltd (SVCL). A similar offer is also expected to be made to Industrial Development Bank of India (IDBI), the other main institutional shareholder in SVCL with 13.90 per cent stake. IFCI owns 6.58 per cent.
The India Cements offer is 36 per cent higher than the revised offer of the Rajus of Rs 55 per share. The battle for SVCL has now entered a crucial phase and is likely to be decided in institutional boardrooms of the institutions and that of the Securities and Exchange Board of India (Sebi).
In a statement yesterday, Raju pointed out that a counter-offer cannot be made as the time stipulated by Sebi has already elapsed. Sebi rules allow a 21-day gap between the initial offer and a counter-offer. The time-limit expired yesterday.
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Meanwhile, the Raju family has revised its initial offer price for SVCL to Rs 55 per share from Rs 25 per share. The offer has been revised after the Rajus bought Industrial Credit and Investment Corporation of India's 6.35 per cent stake in Sri Vishnu.
Sources said India Cements is all set to pick up 10 per cent from institutions and the market and will follow that up with an open offer. "Sebi rules state that any person or company which picks up 10 per cent of a target company will have to make an open offer. We will pick up 10 per cent," said the sources.
The move is likely to invite controversy and the Raju's are likely to complain to Sebi about India Cements' alleged violation of the takeover code.
The Rs 75 per share bid is the second hostile bid for India Cements in the last eight months. SVCL is a Rs 159 crore cement major, formerly owned 40 per cent by Raasi Cement, which has now been taken over by India Cements.
The Raju family had transferred Raasi Cement's 40 per cent stake in SVCL to companies controlled by itself in a controversial deal in er cent has already sold its stake to Raju at Rs 55 per share.
India Cements has raised Rs 83.95 crore by leasing ships to Infrastructure Leasing and Financial Services (IL&FS) Ltd. The company is understood to have utilised these funds to acquire Raasi Cement.
Though India Cements proposed rights issue in the ratio 1:2 at a premium of Rs 40 aggregating Rs 150 crore, it has yet not made the issue. The lease of ships is believed to funded a part of the Raasi acquisition which had cost Rs 390 crore. India Cements had already sold one ship `Raj Rajan' last year to fund acquisition of Visakha Industries and the Cement Corporation of India's Yerraguntla plant. The lease deal involved four ships, but their names were not available. Of the Rs 390 crore paid to acquire Raasi Cements, ICICI has sanctioned a loan of Rs 180 crore to ICL. The rest was raised internally.
India Cements sources said the rights issue will be made within the next six months. For acquiring Sri Vishnu Cement Ltd, India Cements is likely to use funds from Raasi Cement.