AP Paper delisting on the cards?

International Paper seems to be tired of the regulatory hurdles in India and may soon consider delisting of AP Paper Mills (APPM), which it acquired in 2011 report, CNBC-TV18’s Kritika Saxena & Nigel D'Souza quoting sources.

International Paper Corp (IPC) is in talks with bankers to explore options to delist AP Paper Mills. "The timeline and price are yet to be decided, since it is in discussion stages," said a source familiar with the development.

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When contacted however an IPC spokesperson said; "We do not comment on rumours and speculation."

However, the delisting may have to wait for sometime since the open offer of IPC for AP paper mills is currently in contention in the Supreme Court.

Background of IPC- APPM acquisition

International Paper acquired APPM in 2011. The price of the acquisition was Rs 674 per share for the promoter stake.  This included a non-compete fee of Rs 130.7 per share. However the open offer was priced at Rs 544 per share excluding the non-compete fee.

Sebi had cleared the deal but with riders

Sebi disapproved the price discrimination, moved the Securities Appellate Tribunal (SAT). Due to this, IPC had to deposit Rs 112 crore in an escrow account. SAT then in an order dated September 9, 2012, asked IPC to pay the amount in the escrow account to shareholders that had tendered in the open offer, putting the ball in Sebi and the shareholders court.

However IPC then filed a case against the SAT order in Supreme Court - the verdict of which is still awaited.