The Hindu Business Line : Rourkela biz men acquire 59 pc in Raasi Refractories

TWO of the Rourkela-based industrialists specialising in iron and steel business have acquired over 59 per cent stake in Raasi Refractories Ltd (RRL), the Hyderabad-based ailing refractory bricks manufacturer belonging to the Raasi group.

According to sources, Mr Ashok Agarwal and Mr Sanjay Agarwal have acquired 23.33-lakh fully paid-up equity shares of Rs 10 each of RRL, representing 59.2 per cent of the equity, from the Raasi promoters and their associates at a price of Rs 3.60 per share.

RRL is into the manufacture of high temperature shuttle kiln, heavy-duty top and bottom pressing hydraulic presses, PLC controlled heavy-duty mechanical presses, high intensity mixing equipment and latest lab equipment such as hot MOR testing machine and photometer.

At present, the ailing company has a production capacity of 35,000 tonnes per annum for fired and unfired refractory bricks and monolithics.

With an equity base of Rs 3.94 crore, the company incurred a net loss of Rs 83.57 lakh on a turnover of Rs 10.74 crore for the fiscal ended March 31, 2003.

"The acquirers propose to expand the business activity in refractories and related products. The acquirers' family is engaged in iron and steel business for the last 30 years and are keen to diversify/expand their activities into refractories and related products. The acquisition of RRL would facilitate such move. By virtue of this acquisition, the Agarwals will get majority shareholding entitling them to exercise management control over the company," sources close to the deal told Business Line.

The Agarwals are now planning to come out with an open offer to the RRL shareholders to acquire another 20 per cent equity from them at a price of Rs 5 per share, which is more than 38 per cent above the negotiated price at which the acquirers bought the holding of RRL promoters.

Proposing to acquire another 7.88 lakh equity shares from the RRL shareholders, the Agarwals have appointed Karvy Consultants Ltd as the registrar to the open offer. The offer opens on April 7 to close on May 6.

The shareholders who have accepted the offer by tendering the requisite documents in terms of the public announcement and letter of offer can withdraw the same up to May 3, three working days prior to the date of the closure of the offer, sources said.

More Stories on : Mergers & Acquisitions | Steel

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