BD Agarwal, managing director and at present the sole promoter of Vikas WSP Ltd, the country’s biggest maker of guar gum, is hiking his stake in the company from 13% to 42%.
Agarwal is doing this to ward off any hostile takeover attempt, particularly by his competitors, who, he alleged, were behind a move in 2001 to disgrace him, following which trading in the scrip was suspended. The suspension has now been revoked and trading will resume on August 27, after a gap of almost six years.
“We have decided to merge group company Vegan Colloids Ltd with Vikas WSP. Following the merger, the promoter’s stake will go up from the present level of a little over 13% to 42%. This will help to protect the company from any future takeover attempts,” Agarwal said.
Vegan Colloids, which is fully owned by Agarwal, produces acidified dairy products and has a capital base of Rs 22 crore.
Agarwal is also planning to offload 30% stake in the company to strategic investors based in the US and the Netherlands , who are also key customers of the company’s guar gum polymer.
The strategic investors will pump close to Rs 360 crore into a clutch of new projects where total investments will be about Rs 735 crore. The balance of the capex will be funded by a promoter’s contribution of Rs 140 crore and internal accruals of Rs 185 crore.
The new projects involve the setting up of a guar derivative plant at GIDC Savali in Baroda that will commence operations in 2010-11 and an organic food processing unit at Bikaner .
Vikas WSP’s existing units are in Sriganganagar (Rajasthan) and Siwani in Haryana.
In 2006-07, the company achieved a turnover of Rs 250 crore.