The Hindu Business Line : Burmans hike holding in Punjab Tractors to 12.5%

The Delhi-based Burman family, which surprised the market last November by purchasing 11.19 per cent stake in Punjab Tractors Ltd (PTL), has increased its shareholding in the tractor company to about 12.5 per cent in recent weeks through purchases in the open market.

This brings it within sniffing distance from the threshold limit of 15 per cent required for an open offer. Currently, private equity major Actis is the largest shareholder in PTL with a stake of 29 per cent followed by LIC which has a stake of 15 per cent.

Speculations rife

Financial industry sources point out that along with this development, speculation is also rife that Actis may soon want to exit from its investments/or part of its investments in PTL by selling it to the Burmans, providing them with de-facto control of PTL.

In the past, Actis has generally held on to its investments for about 3-5 years before exiting. The private equity major had bought the chunk of its stake in PTL at Rs 153 per share from the Punjab Government in 2003. And, almost three years later, with the stock currently hovering around the Rs 272 mark, the returns on the investments are more than 70 per cent. Market watchers, however, add that given the current valuations in the market, it is likely that the transaction would be done at a pre-determined price rather than at the current levels.

Change in top management?

Sources in financial circles further point out that the next course of action for both Actis and the Burmans might be to bring about a change in the top management of PTL. The rift between the management and Actis came out in the open when the PTL board last year sold 15 per cent of its holding in Swaraj Mazda to Sumitomo even as Actis had made an open offer to enhance its holding in Swaraj Mazda.

Actis had raised questions related to corporate governance at that time over the transaction. Actis currently has two nominees on the PTL board while the Burmans have one. Sources added that some developments at PTL are expected prior to the next board meeting slated in May.

More Stories on : HCV/LCV/Tractors | Mergers & Acquisitions

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
NTPC scouts for blocks in Egypt, Australia

`Oil prices not to impact GDP rate'

Drill research ship to sail on May 3

Soccer fever grips travel agents, airlines, TV channels

Burmans hike holding in Punjab Tractors to 12.5%

STPI plans incubation centres for small units

Momentum to regain strength

`Bharti plan for 74 pc FDI cap okay'