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| ITC reduces stake in Agro Tech Foods |
| Ishita Ayan Dutt / Kolkata Jul 19, 2010, 00:48 IST |
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Cigarette-to-hotels major ITC Ltd has pared its holding in Agro Tech Foods Ltd (ATFL) by close to three per cent, a business it transferred to ConAgra about a decade before.
The shareholding pattern filed with the stock exchanges show ITC offloaded its stake in ATFL over the past nine months, raising speculation if it would fully exit. In September 2009, Russell Credit, ITC’s investment arm, held 16.77 per cent, brought down to 13.87 in June 2010. The stake is now held by ITC Ltd.
Mails to ITC and ConAgra on the subject were not answered. Analyst Anand Shah of Angel Broking said, “This is a small business for ITC. Moreover, ConAgra was running the show and there was no involvement on ITC’s part.”
The ATFL stock on the last trading day closed at Rs 292.70 on the Bombay Stock Exchange (BSE). In September, the stock was hovering around Rs 214.
ATFL, formerly known as ITC Agro Tech Ltd, was promoted by ITC. In 1999-2000, the business was transferred to ConAgra after it had acquired a controlling stake. ITC’s own investment in the company even at the time was only 17 per cent.
While ITC has sold shares in ATFL, it has increased its holding in Hotel Leelaventure Ltd to 10.74 per cent, an increase of 2.26 per cent over the past quarter, through Russell Credit. As on March 31, ITC held 8.48 per cent stake in Hotel Leelaventure. ITC has been buying into Leela since late 2008, when the stock was hovering at Rs 19-20 a share. On Friday, it closed at Rs 49.65.
Leela’s promoters, too, are raising stake. Recently, the company announced issue of preference shares to a promoter group company. As on June 30, the promoters held 53.37 per cent in the company.
In East India Hotels (EIH), ITC’s holding is at the threshold limit of 14.98 per cent, a shade less than the 15 per cent that would trigger a mandatory open offer according to the Securities and Exchange Board of India regulations. Russell Credit has been accumulating EIH shares since 2000, now held by ITC.
ITC Chairman, Y C Deveshwar, said at the company’s earlier annual general meeting that it was not in favour of a hostile takeover of EIH or Hotel Leela, and even suggested joining hands for joint ownership or marketing.
In November 2009, Deveshwar had said they were rethinking their strategy in EIH. That was in the light of a possible deal between the Oberois and Analjit Singh. However, the EIH chairman, P R S Oberoi, recently denied plans of selling stake in the company.
Agro Tech Foods, formerly known as ITC Agro Tech Ltd, was promoted by ITC
In 1999-2000, the business was transferred to ConAgra after it had acquired a controlling stake
ITC’s own investment in the company even at the time was only 17 per cent
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