Industrialist Vijay Mallya’s woes arising from the Kingfisher saga may claim yet another UB group company.
An interesting tussle for control is playing out at the group’s firm Mangalore Chemicals and Fertilizers (MCF), in which Zuari Fertilizers and Deepak Fertilizers hold 24.4 percent and 16.4 percent, respectively.
Zuari’s Saroj Poddar had told CNBC-TV18 last year that Mallya had expressed an intention in buying out the company’s stake, which it was keen to sell. The UB group currently owns 21 percent in MCF.
However, Poddar has said Zuari is yet to hear from Mallya regarding when it can conclude the transaction. Zuari has now decided to wait till February before it would proceed to sell the stake anyway.
When CNBC-TV18 asked Poddar if MCF’s rival, Deepak Fertilizer, already a significant shareholder in the firm, may be interested in buying Zuari’s stake, he said. "No discussions have taken place with Deepak Fertilizer on the sale of our block."
According to sources, Deepak is preparing to make an offer to Zuari as and when it intends to sell.
Road ahead
While Zuari has confirmed it is not in discussion with Deepak Fertilizer, if it does proceed to sell its stake to the firm, it would trigger an open offer as the latter’s stake in MCF would cross 25%.
If Mallya is able to buy Zuari’s stake, it may lead to an outrage among many of Kingfisher’s creditors, employees and tax officials to whom Kingfisher owes several thousands of crores in total.
Deepak could also choose to purchase MCF shares in the open market, which may be an option since several Kingfisher lenders have been selling pledged shares belonging to the group firms.
It thus looks like a conceivable scenario that the UB group may lose yet another of its crown jewels.
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