Pramod Jain makes open offer for Golden Tobacco

Pramod Jain, a minority shareholder in Sanjay Dalmia-controlled cigarette-maker Golden Tobacco Ltd (GTL), today made an unsolicited open offer to acquire another 25 per cent equity in the company at Rs 101 a share.

The voluntary offer aims to acquire 4.4 million fully paid-up shares of Rs 10 each, representing 25 per cent of the issued share capital. GTL today surged 5 per cent on the Bombay Stock Exchange, the maximum permissible rise in a single day for the stock, to end the day at Rs 109.40.

The offer will open on December 30 and close on January 18, 2010. It follows the acquisition of 6.47 per cent stake in the company by Pramod Jain, Pranidhi Holdings and JP Financial Services. A major portion of the stake came through JP Financial Services' acquisition of 890,000 Golden Tobacco pledged shares due to non-payment by an undisclosed borrower, according to an announcement by VC Corporate Advisors.

Jain and Dalmia sparred earlier this year over chemicals firm GHCL, promoted by Dalmia, in which Jain used to be a director. Dalmia alleged that Jain had been trading the company’s shares without making disclosures. Jain said he had not used any insider information.

Jain told Press Trust of India that by increasing his holding in GTL he intended to prevent the promoters from stripping the company of its assets.

Dalmia, on the other hand, said: "In terms of shareholding, the promoters’ sharholding, along with that of our friends, is at a comfortable level. We will apprise you of any further developments on the issue." According to BSE data, promoter holding in GTL is at 27.19 per cent as on September 30, 2009.

According to sources, Dalmia had raised funds from Indiabulls by pledging his shares in GTL, and GHCL, along with some property which were together worth Rs 250 crore. Of this there is a dispute regarding property worth Rs 50 crore, which, according to Indiabulls, was sold before being mortgaged. Dalmia's voting rights on some of the shares had also been suspended by the court, the sources said.