Essel not to buy more IVRCL shares

With 12.27 per cent stake,the Essel group has already overtaken the 11.18 per cent shares held by the promoters,led by Sudhir Reddy,triggering speculations that IVRCL could become a takeover target.

Stating that it got interested in the infrastructure firm after being approached by IVRCL’s investment bankers,Essel group said in a statement that the price sought for promoters’ 11.2 per cent stake was “manifold above the then prevailing market price”.

Subsequently,Essel group decided to acquire the stake from the open market,it said,adding that it has been in constant dialogue since then with the investment banker appointed by IVRCL promoters.

However,the promoters are now neither interested in selling their stake,nor willing to partner Essel as strategic investors in running the company,said the Essel group,which has established a sizeable presence in infrastructure space.

Hence,Essel group has decided to stay invested in IVRCL,but “at present,there is no intent of Essel to increase stake in the Company (IVRCL) by way of an open offer or through the open market,” it added.

Essel group said that it wanted to put to rest “any false and misleading rumours that Essel may make an open offer or otherwise buy additional stake in the company.”

The shares of IVRCL Ltd dropped nearly five per cent to Rs 69.10 in early afternoon trade at the BSE. The stock has gained considerably ever since Essel group’s stake purchase became public on expectations about a possible takeover bid.

Essel said that it would remain invested with its current holding of 12.27 per cent until the general shareholder consensus or other considerations persuade Essel to intervene in the management of IVRCL.

Disclosing that it was approached for stake purchase in IVRCL a few months back,Essel said it “is disappointed to now learn from the investment bank that IVRCL’s promoters are neither interested in selling their stake nor willing to partner with Essel as strategic investors to become a partner with the existing management in IVRCL”.

Essel Group is present in infrastructure business through its company,Essel Infraprojects Ltd,which recently acquired majority stake in a Maharashtra based infrastructure company with a substantial order book.

Pursuant to this acquisition,Essel Infraprojects has also become a joint venture partner of IVCRL in some projects.

“It is in these circumstances,and as the promoters of IVRCL were purportedly not averse to exit but at an impractical price,Essel decided to acquire a significant stake in IVRCL as the acquisition offered exciting possibilities,” Essel said.

While ruling out any immediate stake purchase,Essel said that “as a significant shareholder,Essel will keenly watch IVRCLs management and its performance.”

Essel group also warned against any move by IVRCL for selling some prime assets,which may cause any deterioration in the overall asset base of the company.

In such case,”Essel will weigh all available options including initiating relevant proceedings and other ways of protecting its interest,” it noted.

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