Bhushan Steel's acquisition of Australian coal and mineral resource exploration company Bowen Energy had hit regulatory hurdle. Media reports suggest that the company has overcome the hurdle. Australian takeover panel had raised objections to Bhushan Steel's open offer for Bowen at 14 cents per share.
Mr Neeraj Singal MD of Bhushan Steel & Strips in an interview with CNBC-TV18 spoke about the issue and gave an outlook on the business going forward.
Q - There are a couple of reports that suggest that finally the hurdles that were there from the Australian takeover panel for Bowen Energy you have overcome them. Is it true and can you give us some timeline on when can you go ahead with this particular acquisition?
A - We had made an open offer about three months back for Bowen Energy and now we are holding about 58.8% in Bowen Energy. There were some complaints from some investors that our bid price was less, though it was on an open offer in the open market on the Australian Stock Exchange. But still the takeover panel took it and made some inquiries and put a valuation company to evaluate whether it was properly done.
The findings are that our offer was very valid and it was rather higher to the then market price and it is much more than the valuation of what they have come out with. So I think that hurdle is now over and we are fully in control of this company at 58.8% and it is a subsidiary of Bhushan Steel.
Q - We understand that the Company Law Board has allowed you to convert the 3500000 warrants into shares of Orissa Sponge. Is this a done deal or do you still need the Orissa High Court to give its nod and what is the game plan now? It increases your stake to 29%. Will that mean an open offer for Orissa, what is the game plan from hereon?
A - We had won the case in the Company Law Board. The opponent party has gone to the Orissa High Court and there is a hearing at the end of the month. I hope that there is nothing. In fact it is a complete mismanagement of the promoters of Orissa Sponge. It is a valid warrant that they were not converting. Even other things that they have done, they have siphoned off money out of the company and converted into shares and all those things.
All these matters are now in the Orissa High court. So I do not feel that there should be any problem in converting our 35 lakh warrants. With that we would be around 29% in Orissa Sponge.
Q - What about your open offer you made an open offer in June 2009 it has not got the SEBI nod yet? What is the status over there?
A - I think it basically depends on SEBI when they would clear the open offer. But there are certain issues, litigations going on in the various courts, Delhi High Court and Orissa High Court where the promoters have done some mismanagement in acquiring the shares of Orissa Sponge, the promoter shareholding. Basically the open offer has to go through because there is another open offer by Monnet, in which they are trying to acquire the promoter holding. Till the time the shareholding of promoters is in question, I do not think Sebi would be allowing the open offer to go through because the shareholding which was to be transferred from the promoters of Orissa Sponge to Monnet is in question whether that is a valid shareholding or they are having or needs to be scrutinised.
(Sourced from CNBC-TV18)
