Ballarpur delays listing of UK arm on LSE

PTI New Delhi | Updated on April 01, 2011

Ballarpur Industries has “put on hold” the plan to list its UK subsidiary on the London Stock Exchange, as the firm looks to understand the overall impact of the APPM-International Paper deal on the domestic paper industry.

US-based International Paper’s move to acquire a majority stake in Andhra Pradesh Paper Mills (APPM) for $257 million (about Rs 1,150 crore) is widely expected to have significant impact on the market value of Indian paper manufacturers.

Ballarpur Industries is planning to list its subsidiary Bilt Paper Plc on the London Stock Exchange.

In a regulatory filing today, Ballarpur Industries said that in view of the APPM-International Paper deal, “the company has put on hold the IPO process and will reconsider the same as a possibility at a later time.”

According to the company, the buyout announcement made on March 29 “will set a benchmark for the valuation of paper companies in India and may possibly re-rate the Indian paper industry’’.

The paper maker’s decision to postpone the IPO plan comes less than two weeks after announcing that it would raise $330 million (nearly Rs 1,480 crore) through an LSE listing.

Proceeds from the IPO would be utilised to repay debts as well as fund its expansion plans, Ballarpur Industries had said.

Considering the objective of maximising shareholders’ value, the filing noted that it was important to study the impact of APPM-International Paper deal on valuation over the next few months apart from “potential re-rating possibilities”.

The overall impact should be seen against the backdrop of IPO valuation in London at this time “which is dependent on the current UK IPO market sentiments,” it added.

Meanwhile, the shares of Ballarpur Industries fell over 2 per cent to Rs 35.55 in the afternoon trade on the Bombay Stock Exchange.

Published on April 01, 2011

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