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Tata Chem eyes Egyptian firm
Business Standard—
May 26, 2005
Tata Chemicals has made an open offer of $450 million (over
Rs 1,950 crore at an exchange rate of Rs 43.40 per dollar)
to acquire Egyptian Fertilisers Company, a firm partially
owned by the government of Egypt. Homefield International,
a wholly-owned subsidiary of Tata Chemicals, has offered to
buy 1.475 million Egyptian Chemicals shares, representing
a 100 per cent stake in the company, at $305 per share. The
face value of the share is $100 each.
PK Ghose, chief executive officer of Tata Chemicals, said
Homefield had already signed an agreement with the majority
shareholders, who hold over 88 per cent stake in the company.
"The bid has been made to buy out the others as well.
The minimum acceptance of the offer is 88.25 per cent, meaning
the Tata company will not buy any share unless it gets this,"
he added. The Tata Chemical stock closed today at Rs 165.60,
marginally higher than yesterday's closing of Rs 164. It touched
an intra-day high of Rs 168.
The Egyptian company was put up for sale through the government's
disinvestment policy. The public shareholding of the company
stands at 46 per cent and the combined shareholding of banks,
government and institutions is 54 per cent. Ghose said Tata
Chemicals would fund the acquisition through the recently
concluded foreign currency convertible bonds, internal accruals
and bridge loans. The Egyptian company, which manufactures
urea and ammonia, enjoys a 25-year tax holiday and is located
in the Suez Industrial Zone.
It has a state-of-the-art plant to manufacture about 400,000
tonnes of ammonia and 650,000 tonnes of urea, employs about
400 people and has a marketing presence in Europe, North America
and Africa. The company is in the process of doubling its
capacity by 2006. "The bid has been submitted in line
with our growth aspirations. We are one of the bidders and
this open offer process is also subject to counter offers
by other parties.
TCL has recently acquired one-third stake in a Moroccan Joint
Venture, IMACID in March 2005 and we are on a continuous lookout
for domestic and global opportunities. It is too early to
comment on the exact details of the deal," Ghose said.
The open offer comes close on the heels of the Chatterjee
Group's $5.5 billion acquisition of Basell Polyolefins.
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