SEBI lets Ficon hike SPIC stake to 44.5 per cent sans open offer

The Securities and Exchange Board of India (SEBI) has granted exemption to Ficon Holdings Limited, a part of the promoter group of Southern Petrochemical Industries Corporation Limited, to increase its holding in the petrochemicals major to 44.5 per cent from 17.12 per cent, without going through the process of an open offer.

Ficon will acquire an additional 6,46,97,361 equity shares in SPIC through conversion of the outstanding 2,12,19,101 fully and compulsorily convertible preference shares of Rs10 each at an issue price of Rs18 each and the proposed preferential allotment of 4,34,78,260 equity shares of Rs10 each, at an issue price of Rs23.

Pursuant to the conversion and the proposed preferential allotment, the shareholding of Ficon Holdings will increase from 17.12 per cent to 44.50 per cent of the equity capital of SPIC and the shareholding of the promoter group as a whole (including the acquirer) to 58 per cent from 37.29 per cent.

Ficon Holdings Ltd, an overseas body incorporated in Mauritius as a private company with limited liability, is part of the SPIC promoter group (M A Chidambaram group).

SPIC, which is in a critical financial position, is availing of a corporate debt restructuring package. SPIC had got its entire secured debt portfolio restructured in the three years beginning 2003. Since then, Asset reconstruction Company India Ltd (ARCIL) had acquired about 84 per cent of the assignment rights of the secured lenders in SPIC.

The promoter group is in continuous discussions with ARCIL for further restructuring SPIC's loan liability to sustainable levels. ARCI is said to have agreed to the promoter group's request to infuse Rs50 crore into the company's equity capital.
 
The capital infusion was critical for revival of the company and for the reopening of its urea and ammonia plants, which were lying closed since March 2007, the promoters argued.

SPIC is also getting government help to restart its fertiliser division.
 
SEBI passed the order exempting Ficon Holdings from complying with the provisions of the takeover regulations with respect to the proposed acquisition after the SEBI Takeover Panel recommended the grant of exemption to the promoters from making an open offer, SEBI said in a release.