FI stand on ACC mega deal vindicated 8212; Gupta

DECEMBER 22: Financial Institutions FIs which had blocked the preferential allotment of equity by the cement major, ACC to the Tatas last year strongly feel their stand has been vindicated by the high price that Gujarat Ambuja Cement is paying to acquire 7.2 per cent Tatas stake in ACC.

Reacting strongly to the allegation made by the Tata group that the partial divestment of stake in ACC was forced by the recalcitrant attitude of the FIs, Industrial Development Bank of India chairman GP Gupta said: quot;The price at which Tatas have divested part of their stake, Rs 370 per share of ACC, justifies the stand taken by FIs as it is much higher than the Rs 110 per share of ACC which the promoters were willing to pay earlier.quot;

quot;The FIs stand while blocking the preferential issue was that ACC deserved a much better valuation. We had suggested a higher price for the preferential issue, the route through which the promoters wanted to increase their stake. Although the promoters had rejected the FIs demand for ahigher price for ACC shares at that point of time, they have done just that thing now. So their allegation is not justified,quot; Gupta said.

However, the financial institutions have yet to decide on whether they would sell their stake to the highest bidder in case the French multinational Lafarge decides to come out with a counter offer at a much higher price.