Mallya Cuts Hoechst Agrevo Stake

Liquor baron Vijay Mallya is believed to have sold two per cent of his 20 per cent stake in Hoechst Schering AgrEvo and plans to further reduce it to 15 per cent.

This is a part of Mallyas plans to lower his investment in the pharma companies. Mallya had earlier held 26 per cent in Hoechst Marion Roussen and Hoechst Schering AgrEvo, of which he sold six per cent.

Meanwhile, HMR is forming a new joint venture with Chiron Corporation of USA for making vaccines. Hoechst will hold 49 per cent and will invest Rs 10 crore in the venture. Chiron will hold the rest.

 

The joint venture will make vaccines at HMRs Ankleshwar facility. HMRs anti-rabies vaccines, RABIPUR, will be transferred to the new venture. HMR will distribute and market all the products.

Addressing shareholders at the companys annual general meeting in Mumbai yesterday, Vijay Mallya, chairman said Hoechst AG has no plans to hike stake in group companies in India like HMR and Hoechst Schering Agrevo.

The German parent holds 50.1 per cent in both companies.

The statement is significant as it means that the six per cent offloaded by Vijay Mallya to Morgan Grenfell will not be picked up by Hoechst AG.

Mallya had some time back sold six per cent of his 26 per cent stake in both companies HMR and Hoechst Schering to the FII, for Hoechst AG to pick up later.

Hoechst AG had approached Sebi seeking exemption from a public offer but was rejected. The German companys decision not to pick up the stake would mean that it does not want to get involved in the lengthy process of making an open offer and hiking its stake to 70 per cent.

Under Securities and Exchange Board of India takeover guidelines, any promoter who holds between 10 to 74 per cent in a company wanting to hike his stake further would have to make an open offer for 20 per cent from the public.

HMR is also planning a foreign debt issue of $3 million to part-finance its capital expenditure of Rs 30 crore for the year.

It plans to invest around Rs 60 crore at its Verna plant in Goa over a three year period and the plant is expected to be commissioned in February next year. HMR is targeting a turnover of 40 per cent from this plant.

HMRs domestic sales for first quarter 1997 are Rs 89.91 crore. Export sales is Rs 31.2 crore. Total sales is Rs 121 crore for this period.

Mallya said there are plans to close down the Mulund plant and that no voluntary retirement scheme would be offered during the current year. HMR is targeting a reduction in staff cost from 11.87 per cent of turnover to less than 10 per cent.