Southern Petrochemical Industries Corporation (Spic), of the AC Muthiah Group, has put off its proposed inter se transfer of shares at market prices in its only profit-making subsidiary Manali Petrochemical (MPL) to SIDD Life Sciences (SLSPL), a privately held promoter group company, for the time being.
Though the company has not cited any reason for putting off the deal, analysts feel it may be due to the slide in the stock prices of MPL during the past three months leading to lower valuations.
As per the plan, SLSPL was to acquire 5.01 crore shares accounting for 29.12% of the total paid capital of MPL from Spic at market prices at the cut off date of February 23.
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).
?The average share price of MPL fell from R15 in December 2010, to R 12.13 in January 2011 and further to R11.98 in February this year. Spic may be waiting for the share prices to improve to make a better realisation from the divestment,? an analysts with a local brokerage house said.
?At an average price of R15, the sale would have fetched a consideration of R75.15 crore. But at the prevailing price, the realisation would be far less,? he added.
As per the CDR package approved by Arcil, promoters have to bring in an amount of R400-450 crore to revive Spic.
According to banking sources, promoters have brought in around Rs 390-400 crore by way of fresh equity as well as by divesting Spic’s non-core assets.
Promoters brought in Rs 150 crore through wholly-owned subsidiary Ficon Holdings, Mauritius, by way of a preferential issue and another R230 crore by selling 52.17% stake in Indo-Jordan Chemicals Company (IJCCL). It had also put on block most of its immovable assets including properties in major cities, including Mumbai and Chennai.