MUMBAI, March 10: The open offer for Oswal Overseas' shareholders at Rs 21 per share has given the investors a unique opportunity to exit from the illiquid stock. The scrip was last traded on the Bombay Stock Exchange on December 20, 1995, at Rs 25.The offer price is also attractive because it is at a 25 per cent premium to the price offered to the promoters for their stake. The acquirer, Kulwant Singh Chadha & Associates, plans to pick up around 22.83 lakh shares from the existing promoters (Ashok Oswal & Associates) at Rs 16.86 per share.
The offer, which will remain open from May 5 to June 4, is not subject to any minimum level of acceptance from the shareholders. The acquirer hopes to pick up 6,17,200 shares i.e., 20 per cent of the total paid-up capital of the company. Currently, the public holds around 26 per cent of Oswal Overseas' equity.
In November 1992, Oswal Overseas had come out with its maiden public offering. Till 1995, the company fared well and comfortably surpassed the projectionsmade during the public offer. For the year ended June 1995, on a turnover of Rs 19.43 crore, the company earned a net profit of Rs 1.37 crore. For the year, the company even paid a 16 per cent dividend. In order to diversify (from the manufacture and trading of fancy yarns) into sugar production, the company planned to set up a sugar mill at Bareilly in Uttar Pradesh. The company planned to tap the capital market with a rights-cum-public offer to part-finance the project (estimated at Rs 60 crore by ICICI). However, the company could not come out with an issue due to depressed market conditions.
Thereafter, owing to bad market conditions, the company's net profit stood at Rs 93 lakh for the year ended June 1996. For the half-year ended December 1996, it reported a net profit of Rs 15 lakh.
The acquirer wants to implement and run the company's sugar mill at Bareilly. In the capacity of a trustee of the current promoters, they have already taken over the management of the company and invested Rs 15 crore tobridge the equity gap in the venture.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
