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C.R. Sukumar

Hyderabad , March 30

Subhkam Group of Mumbai, promoted by Mr Rakesh S. Kathotia, is all set to acquire controlling stake in Nagarjuna Agri Tech Ltd (NATL), part of the Hyderabad-based Nagarjuna Group with diversified interests in fertilisers, pesticides, agri-products, power and oil.

According to sources, Subhkam Group is planning to initially acquire 24.71 per cent holding in NATL through the preferential offer route. As a part of this, the Rakesh Kathotia entity would acquire two lakh shares and 2-lakh share warrants convertible into equity shares.

Since acquisition of more than 15 per cent holding attracts the SEBI Takeover Code, the group would go in for an open offer to acquire another 20 per cent holding, taking its total holding in the Nagarjuna Group company to 44.71 per cent. Subsequently, the conversion of share warrants into equity shares enables the Subhkam Group to further consolidate its stake in NATL to 55.66 per cent on the expanded equity of Rs 10.09 crore from the current equity of Rs 6.09 crore.

Funds crunch

Sources told Business Line that NATL had faced continuous financial and business difficulties that resulted in substantial accumulated losses. Though the market conditions have started improving, the company is currently not in a position to take advantage of the opportunities owing to serious funds crunch.

Keeping this in view, the company has decided to forfeit 26,58,700 shares at a board meeting held during the first week of March. The company has also approached certain financial investors, who have showed interest in investing in the company's equity. Following the preferential offer of equity shares, the holding of NATL promoters would come down from the existing 47.32 per cent to 35.62 per cent initially. The conversion of share warrants into equity shares later would further bring down their holding in the company to 28.57 per cent on the expanded equity, sources added.

More Stories on : Preferential Allotments | Mergers & Acquisitions | Foods & Food Processing

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