The £620 million Dutch major Acordis has sold 30 per cent stake in Century Enka, its joint venture with the B K Birla group, for nearly Rs 105 crore (Rs 1.05 billion).
Acordis Overseas Investment BV, a part of the Acordis group, sold 85,93,109 shares of Century Enka, representing 30 per cent stake, on December 21 for Rs 122 apiece.
Post sale, the shareholding of Acordis has come down to 8.36 per cent. The Birla group holds a 16.74 per cent stake, on September 30, 2005.
Confirming the sale, a Century Enka executive said the purchase of the shares from the foreign partner was in line with the company's plan to buy back 30 per cent stake from non-resident shareholders. The Century Enka board would meet towards the end of this week to consider the sale.
A source in the Birla group said the buy back programme, which was approved by the Calcutta High Court last month, did not require an open offer to the minority shareholders. Century Enka fixed December 8 as record date for the buy back.
According to the buyback plan, Century Enka will extinguish the shares it bought from the foreign promoters. Consequently, the shareholding of the Birla group and Acordis would go up on the reduced paid-up equity of the company.
A back-on-the-envelop calculation suggests that the Birla group's holding would go up to nearly 24 per cent while the foreign company's stake would come down to nearly 12 per cent.
At the time of announcing the buy back, the company said it was "beneficial to the remaining shareholders" as it would result in increase in book value and earning per share.
Incorporated in 1965 with collaboration with Enka International, a part of Akzo Nobel, Century Enka witnessed entry of Acordis in the company in 2005. The change of hands from Akzo Nobel to the man-made fibre major Acordis followed restructuring in Akzo Nobel in 1999.
Acordis was formed at that time by bringing under one roof the worldwide fibre business of Akzo Nobel and the former Courtaulds Plc.
Getting more
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Acordis Overseas sold 85,93,109 shares of Century Enka, representing 30% stake, on Dec 21 for Rs 122 each
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According to the buyback plan, Century Enka will extinguish the shares it bought from the foreign promoters
- The other route for allocation of captive blocks is through a screening committee
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