Ballarpur Ind puts off arm's listing on LSE

Our Bureau Mumbai | Updated on April 01, 2011


Paper industry valuation changes post AP Paper deal

Ballarpur Industries Ltd (BILT) has put on hold its plan to list its wholly-owned international subsidiary Bilt Paper Plc on the London Stock Exchange (LSE) following renewed valuation of Indian paper makers after International Paper acquired controlling stake in Andhra Paper at a huge premium.

The Group had consolidated the commodity paper division, pulp business and Malaysian operations under Bilt Paper Plc to raise $330 million through an offer of new and existing shares on LSE.

A trendsetter

The company believes that the acquisition of International Paper in the Indian market will set a new benchmark for valuation of paper companies and may possibly re-rate the Indian paper industry, said Ballarpur Industries in a statement. “We believe it is important to study the impact of the acquisition and re-rating possibilities over next few months, as against the IPO valuation in London which depends on the UK IPO market sentiment.

In view of this, the IPO process has been put on hold and will be reconsidered at a later stage,” it added.

Bilt owns 79.5 per cent in Bilt Paper Plc while the remaining stake is held by Singapore's sovereign wealth fund GIC and JP Morgan.

Bilt had earlier indicated that the two financial institutions may sell part of their holding during the sale of shares in London.

Usage of funds

Of the net IPO proceeds, Bilt had proposed to spend $170 million on expansion at pulp mill facilities and two existing paper production units.

It also wanted to cut its debt through redemption of about $140 million of profit sharing certificates held by Bilt International Holdings, a wholly-owned entity of Bilt which in turn owns the Bilt Paper Plc stake.

Bilt has an aggregate annual paper production capacity of 7,59,000 tonnes and pulp capacity of 3,49,000 tonnes through its six manufacturing facilities in India and one in Malaysia. Avantha Group, the holding company of Mr Gautam Thapar promoted companies, owns 49.40 per cent in Ballarpur Industries.

Besides paper and pulp, Avantha Group has business interest in power generation and distribution, power transmission and distribution equipment and services, food processing, farming, forestry, chemicals, infrastructure, Information Technology and Information Technology Enabled Service (ITES).

The Group's net sales during the December quarter were at Rs 1,126.9 crore, while net profit stood at Rs 58.91 crore.

Shares of Ballarpur Industries were down two per cent at Rs 35 on Friday.

Published on April 01, 2011

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