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The Karnataka High Court ruling against stake sale in United Spirits to Diageo has also cast a shadow on Zuari's plan to sell its stake in Mangalore Chemicals and Fertilizers, a firm amidst takeover battle.
A meeting between Zuari's Saroj Poddar and UB Group's Vijay Mallya, scheduled this week, has now been postponed following the court order. While Poddar has said that he would sell his stake to highest bidder, he wants to meet Mallya before making a final move. The meeting, which now stands canceled, was being seen as one which would give direction to the ownership battle incepted during July.
“Yes, we were supposed to meet but recent developments have come in the way. So, before next year , I do not see any way forward,” Poddar told Business Standard by adding that next scheduled date for a meet was yet to be decided.
The Karnataka High Court on last Friday ruled as void a part of the sale of share of United Spirits Ltd (USL), by United Breweries Holdings Ltd, to Diageo, worlds largest largest distiller. While Mallya is busy protecting his holding in USL and fighting hard with his lenders, the liquor baron and once king of good times is now busy meticulously invigilating the legal angles before approaching the apex court in this regard. The Supreme Court will open in January 2014.
The ownership battle goes back to July 2013 when Pune Based Deepak Fertislisers made a surprise entry into Mallya's MCF by buying over 24% stake from the open market. Poddar had 10% stake by then into MCF but had to up his ante to be alive in race to acquire one of the last jewels in Mallya's crown. Poddar, within no time bought more shares from open market to take his stake to over 16%. After MCF's annual general meeting, Mallya had also claimed he could buy shares back from both Zuari and Deepak.
Senior official at Pune's Deepak Fertilisers indicate that Mehta too has been in touch with Mallya over a possible solution to the existing scenario but negotiations have not turned into fruitful decisions.
A sector analyst said, “Mallya's biggest concern at the moment is Diageo deal because that took place when he was in sea of debt.
However, it is clear neither Zuari nor Deepak Fertilisers would want to settle in as portfolio investor. Meanhwile, the stock prices of MCF can appreciate which can fetch Mallya a better deal.”
While first tranche of shares came to Poddar at relatively cheaper price, Deepak Fertilisers had to pay a hefty Rs 180 crore for its stake in MCF it bought on July 3. Poddar who has announced his intent to make an exit from MCF is likely to make sure he makes most out of MCF shares, for Deepak Fertilsers gains are more than handsome. MCF has the capacity to produce 380,000 tonne of urea annually which can be scaled up further. This is not it, a vacant 60 acre land at the existing facility makes MCF a lucrative buy. At a time when, land acquisition is one of the biggest worry for India inc, such a piece of land would be useful for expansion without having to go through a rough patch to acquire land.
