We are not looking at any asset sale: Mangalore Chemicals

After Deepak Fertilisers picked up a little less than 25 percent stake in Mangalore Chemicals, the latter's management has clarified that it was not a hostile takeover.

In an interview to CNBC-TV18, Deepak Anand, managing director, Mangalore Chemicals & Fertilizers said that four stakeholder offloaded stake to Deepak Fertilisers and there is no further talk of any asset sale in the company. Read This: Deepak Fertilizers up 4% on stake buy in Mangalore Chemical Meanwhile, Deepak Fertilizers & Petrochemicals Corporation today said it has acquired 24.46 per cent stake in the Vijay-Mallya-promoted Mangalore Chemicals for an undisclosed amount. However, at current market price, the valuation goes upto above Rs 150 crore. Below is the edited transcript of his interview with CNBC-TV18: Q: First a word on the purchase that Deepak Fertilizers made of a significant stake in your company. Was that a hostile takeover? Was the Mangalore Chemical’s management aware of the interest that Deepak Fertilizers had in your company and that it wanted to acquire such a large stake? A: We are not really involved with these kinds of things. It was Deepak Fertilizer’s decision. I cannot really talk about their interest because I don’t know. Q: Even so, it has changed the game significantly for Mangalore Chemicals. Now they hold just under 25 percent stake, there is the UB Group that holds about 20 percent and there is Zuari Industries as well that has stated its interest in your company so one just wonders how these dynamics are playing out and whether or not there is some kind of tussle underway in terms of gaining control or wanting to grasp control by any of these entities? A: I am really the wrong person because I am not involved in this. It is interesting I must say because what has happened is that four major shareholders have sold out to Deepak Fertilizers. So otherwise there is really no significant change in the shareholding. UB continues with 21-22 percent, Zuari with 10 percent and now Deepak Fertilizers with 24 percent odd. Q: Is the Mangalore Chemical’s management open to a significant enough stake buyer if the price is right and the fit seems right. Are you looking to reduce the stake that UB holds in Mangalore Chemicals or is that not for discussion? A: I am not the person to ask this question. I think you have to checkout with the promoters. We are sort of professional managers in the company. Our job is to keep the show on the road as it was. Q: The promoter holding currently stands at 22 percent, the UB Group holding and 13 percent of that is pledged in the market. Is there a risk that if you don’t revoke these pledges, they could be sold to a third party either to Deepak Fertilizers or to Zuari further strengthening the case they have? A: Again, I am not the correct person to ask this question. I have no comments on this. Q: Do you know at all if the management is in any discussions with lenders to revoke those pledges, whether the USL money will be used to revoke any of those pledges? A: I really am not aware of this because this is really between the promoters of UB Group and the banks. Q: One question on whether or not in past couple of days have there been any discussions held by these key stakeholders regarding the future of Mangalore Chemicals and how best to approach any development plans or any expansion plans that you may have? A: It is too early to say anything. I have not been approached so far on any of these issues. The deal was just announced day before yesterday. So I presume something will happen over a course of time. It is much too early to make any comments on this. All I can say is that we, in the operating management, have not been approached on any of these issues so far. Q: You can give us some facts at least on what the current assets are that Mangalore Chemicals have in terms of land as well as other assets that have been put on the block? A: No assets have been put on the block. I think it is sort of very clear in our balance sheets. We have this fertilizer plant located in Mangalore on land just opposite the port. So this deal from what I can make out is really just shares transferring from one shareholder to another. There is no talk about assets being disposed off.