The Hindu Business Line : Shapoorji group open offer for FAL

THE Shapoorji Pallonji group has made an open offer for 20 per cent of the equity in the Chennai-based FAL Industries at a price of Rs 25 per share in the backdrop of a pending dispute with SEBI about a public offer for the company.

The Shapoorji group has contested SEBI's action, and pointed out that the current open offer for FAL is "without prejudice" to the pending dispute. The open offer announcement made by the Shapoorji group indicated that the current offer price of Rs 25 is at a premium to the penalty that would have to be paid by the group in the event the pending dispute goes against it.

The Shapoorji group acquired control over the Tata group's Forbes Gokak in 2001-02. Forbes Gokak has a 31.64 per cent stake in FAL, and SEBI pulled up Shapoorji group in May this year for not having made an open offer for FAL on the heels of the Forbes Gokak acquisition.

At the moment, the Shapoorji group controls about 39.26 per cent of FAL Industries through Forbes Gokak and other companies. The Tata group controls another 20.65 per cent in FAL.

FAL is a domestic appliance company that derives about 70 per cent of revenue from the sale of vacuum cleaners and motors used for domestic appliances. The company registered a profit after tax of Rs 76 lakh on revenue of Rs 74.5 crore for the year ended March 2003.

Forbes Gokak is engaged in yarn manufacture, engineering products and logistics solutions, among others was acquired by the Shapoorji group in 2001-02 after the Tatas chose to exit. Once the Tatas stake had been acquired, an open offer by the Shapoorji group followed.

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