Chescor Eyes 11% In Bilt Chem, 15% In Ap Rayon

Chescor Holdings, a Hong Kong based foreign institutional investor, is set to pick up 15 per cent equity stake in L M Thapar group company, AP Rayons and an another 11 per cent stake in Bilt Chemicals, the proposed new company which will undertake the chemicals business, at present, undertaken by group flagship Ballarpur Industries Ltd.

In a twin-package deal clinched by the Thapars recently, Chescor is pumping in about Rs 22 crore as equity investment to pick up shares of AP Rayons at a premium of Rs 29.

As a result, the equity shareholding of Ballarpur Industries in AP Rayons will fall from the existing 50 per cent to about 42 per cent.

 

Simultaneously, Chescor will pay about Rs 14 crore directly into Bilt Chemicals to pick up its shares at a premium of Rs 25 per share. The pricing for the equity holding of the Thapars in Bilt Chemicals through AP Rayons was also frozen recently with AP Rayons agreeing to bring in Rs 18 crore as initial investment into the new company.

Of this, Rs 10 crore is through preference shares while the rest is being brought in by subscribing to the equity shares at par. The equity contribution of A P Rayons will gradually be increased through convertible debentures at a later stage. Bilt Chemicals proposed to have an equity base of Rs 47 crore.

Ballarpur Industries will seek shareholder approval for the proposed acquisition of the BILT Chemicals stake by A P Rayon at the extraordinary general meeting of the latter, scheduled for March 3.

The Chescor deal brings the process of restructuring in Ballarpur Industries a step closer to completion. The restructuring involved spinning off the chemicals business into a separate company and splitting the company vertically by forming a new firm, Bilt Investments, with the same shareholding structure as in Ballarpur, the flagship which will retain only the paper business with itself.

All the real estate projects and properties with Ballarpur is proposed to be transferred to Bilt Investments which will primarily function as an asset management company.

Earlier, the Thapars had roped in Saudi Arabia-based business house Al Murjan in a Rs 135 crore deal, which gave Murjan a 16.7 per cent stake in Ballarpur, along with redeemable preference shares in the company.

Al Murjan, which paid a premium of Rs 80 for each Rs 10 share of Ballarpur for its 16.7 per cent acquisition, is to be issued 1,00,00,000 fresh equity shares on a preferential allotment basis that will dilute the Thapar group holding in Bilt from the existing 28.9 per cent to 24.06 per cent.

The company, which has already received government approval for foreign investment, received its shareholders approval at the February 6 EGM held for the purpose.