SIDD Life Sciences (SLSPL), a little known unlisted firm purportedly promoted by Ashwin Muthiah, vice-chairman of the Southern Petrochemical Industries Corporation (Spic) and scion of the AC Muthiah Group, has bought close to 32% held by Spic in Manali Petrochemical (MPL), the group?s only profit-making subsidiary, for about R65 crore.
The purchase has been through an inter se transfer at market prices. The deal pegs the enterprise value of MPL at between R220 crore and R230 crore, analysts said.
The R400-crore Manali Petro had a cash and cash equivalent to the tune of R41 crore on its book as of the financial year ended March 31, 2010. The company has a paid up equity capital of R86.03 crore, and for the quarter ended December last, it had clocked a net profit of R7.53 crore over a turnover of R117 crore.
MPL, in a recent regulatory filing, said it received information from Spic that the parent company sold 5.44 crore shares of R5 each of MPL to SIDD Life Sciences for Rs 65.01 crore.
Spic has sold MPL shares at a price of R11.95 per share. Post sale, the promoters holding in MPL would remain intact since SLSPL, though an unlisted entity, also belongs to the promoters group, analysts pointed out.
Spic was holding 38.29% stake in MPL and post divestment, its holding in MPL had come down to rougly 6.67%. The promoters, AC Muthia Group, are holding 45% stake in MPL.
Spic had earlier deferred the divestment plans in MPL in anticipation of surge in stock prices after the Union Budget. However, the stock had not shown any uptick and has been trading at its R11-R12 range. The average share price of MPL fell from Rs 15 in December 2010 to R12.13 in January 2011 and further to R11.98 in February this year. MPL stock closed on the NSE on Tuesday at R11.60, down 1.69%. Spic had to divest its stake in MPL to raise cash as per a corporate debt restructuring (CDR) package sanctioned by the Asset Reconstruction Company of India (Arcil).
As per the CDR package approved, promoters have to bring in an amount of R400 to R450 crore to revive Spic. According to banking sources, promoters have brought in around R390 crore to R400 crore by way of fresh equity infusion as well as by divesting Spic?s non-core assets.