The Hindu Business Line : Spinnaker to acquire 45.23 pc in Sanghi Inds

THE British Virgin Islands-based investment fund Spinnaker Global Opportunity Fund Ltd along with two other Spinnaker funds has decided to make an open offer to the shareholders of Sanghi Industries Ltd (SIL), the Hyderabad-based cement and clinker manufacturer, for acquiring 4.35 crore equity shares of Rs 10 each aggregating to 20 per cent of equity.

The acquisition is being described as a move to rehabilitate SIL, which has been facing financial difficulties over the past few years due to delay in the implementation of cement project.

At present, SIL is unable to service its huge debt repayment obligations.

Spinnaker funds recently entered into an investment and shareholders agreement with SIL and its promoters to acquire 2.89-crore equity shares of Rs 10 each, aggregating to 13.26 per cent equity, through preferential offer route. This took the total holding of Spinnaker funds in SIL to 25.23 per cent equity, triggering an open offer to the SIL shareholders.

The SIL board has allotted 2.89 crore equity shares of Rs 10 each at a price of Rs 18.50 per share to three of the Spinnaker funds. Though SIL has issued an allotment advise to the Spinnaker funds to the effect that the specified number of equity shares were allotted, these shares should be physically allotted to them only upon fulfilment of all obligations under the SEBI Takeover Regulations.

In line with the agreement, the overall management and control of SIL would remain with the promoters - Mr Ravi Sanghi, Mr Anand Prakash Sanghi and Mr Sudhir Sanghi. "The Spinnaker funds will be significant financial investors with certain minority protection rights designed to enable them to preserve the value of their investment in SIL," the merchant banking sources told Business Line.

Prior to acquiring the SIL shares through preferential offer, the Spinnaker funds had purchased 2.6-crore equity shares of SIL from F.L. Smidth Ltd and Fuller International Inc on November 25 last year. Following the preferential allotment, the holding of Spinnaker funds in SIL increased to 25.23 per cent.

Prior to the preferential allotment, the paid-up equity of SIL stood at Rs 175 crore comprising 17.5-crore equity shares of Rs 10 each. SIL has allotted 2.89 crore equity shares of Rs 10 each to Spinnaker funds and also converted share application money lying in the books of accounts into 1.4 crore equity shares, taking the total paid-up capital to Rs 217.97 crore comprising 21.79 crore equity shares of Rs 10 each in terms of SEBI Takeover Regulations.

According to merchant banking sources, Spinnaker funds believe that SIL has sound fundamentals and is poised for strong growth in future.

"The acquirers have agreed to acquire 2.89-crore equity shares of SIL at an investment of Rs 53.48 crore. Further, they are willing to pump in Rs 80.65 crore to acquire 20 per cent holding from the public. However, since they are going to remain merely financial investors, the acquisition of 20 per cent equity from SIL shareholders will not result in any change in control of the company."

The Spinnaker funds have decided to acquire holding from public at a price of Rs 18.50 per share. The open offer begins on March 9 to close on March 28.

While Yes Bank has been appointed as the lead managers to the open offer, CIL Securities would act as Registrars to the offer.