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Journalism of Courage
CHENNAI, June 6: The sick Cauvery Sugars and Chemicals Ltd (CSCL) is to be taken over by EID Parry (India) Ltd, belonging to the Murugappa group. The Murugappa group company, along with Santhanalakshmi Investments Ltd (SIL) would buy out the entire shareholding of the current promoters of the company, a group press release said here today.
The two acquirers would soon come out with an open offer to the remaining shareholders, as required by the takeover code, and would be supported in the effort by the current promoters, the group said. SIL had already been allotted equity at par by CSCL for Rs.12.08 crore, against the money brought in by the former for implementing a revival scheme sanctioned by the Board for Industrial and Financial Reconstruction (BIFR).
The BIFR had okayed the scheme in January 1998 requiring Rs.16.70 crore to be brought in by promoters and associates including India Meters Ltd, Tandem Investments Ltd and SIL in the form of equity or interest free unsecured loans. The scheme alsoprovided for acquisition of CSCL shares by promoters and associates from the financial institutions at par.
The takeover announcement confirmed speculation to the effect in the stock market, which saw the below par Cauvery scrip being actively traded and touching Rs.10 value. On June 1 and June 2 last, a total of at least three lakh shares were traded on the Bombay Stock Exchange (BSE), but the Murugappa group had denied that it had anything to do with these transactions. The takeover would consolidate the position of EID Parry as a leading sugar manufacturer in the South and would add the 2,500 TCD (tonnes crushed per day) sugar mill of CSCL at Pettaivaithalai in Tamil Nadu to its stable.
The group, with varied interests in sugar, confectionery, fertiliser and agro-based products, ceramics, bicycles and finance, is currently implementing a group reorganisation plan which, inter alia, envisages growth by acquisition in core sectors.
