Balrampur Chini promoters in talks to sell stake to Renuka Sugars
12 Dec 2009
The Kolkata-based Saraogi family is in talks to sell their 36.5 per cent stake in Balrampur Chini to the country's biggest sugar refiner Shree Renuka Sugars, media reports said.
There were reports that Balrampur promoters were in talks with Bajaj Hindusthan a few months ago, but the deal had to be called off because of differences over valuations and payment structure.
When the Bajaj and Balrampur negotiations were going on, the stock was trading at around Rs170-180 per share, and Balrampur had asked for Rs200. The Balrampur Chini stock is now trading around Rs150.
At Rs180 a share, Shree Renuka needs to mobilise Rs2,700 crore to finance the acquisition of the equity holdings of Balrampur's promoters as well as for the mandatory 20 per cent open offer.
According to analysts, Shree Renuka will find it difficult to manage that amount of cash as it had already acquired Brazilian sugar and ethanol producer Vale Do Ivai Acucar E Alcool for $82 million.
If this deal goes through the capacity of Shree Renuka will go from 60,000 tonnes crushed per day to nearly 1,36,000 tonnes crushed per day, which will be surpassing Bajaj Hindusthan.
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