Feinchemie to offload Epic Enzymes equity
By Praveen Chandran | 11 May 2002
Mumbai: The German chemical major Feinchemie Schwebda GmbH has decided to exit India. It will disinvest the entire 60.5-per cent equity in its Indian subsidiary, Epic Enzymes Pharmaceuticals and Industrial Chemicals Ltd, to Epic managing director P K Mahajan for a princely sum of just 1 deustche mark (Rs 22).
The Feinchemie Schwebda management has signed an agreement with Mahajan in this regard recently. As per the agreement between the two parties, a total of 51,95,700 equity shares of Rs 10 each representing 60.5 per cent of the voting capital of Epic Enzymes will be sold to Mahajan.
Mahajan has confirmed that an offer is being made to acquire the fully paid-up equity shares of Epic Enzymes in collaboration with Vineet Suchanti. Suchanti is the managing director of Keynote Corporate Services Ltd (KSCL), which is promoted by H R Hemnani Associates and M B Madhu Prasad.
Mahajan has entered into an agreement with Suchanti whereby the latter has agreed to act as 'white knight' and make equity shares of KSCL available for the offer against the equity shares of Epic.
The open offer is to acquire further 17,17,580 equity shares of Epic representing 20 per cent of the issued and paid-up equity share capital of the company at a price of Rs 7.80 per equity share. This amount is payable at the rate of one equity share of the face value of Rs 10 each of the fully paid-up share of KCSL for every two equity shares of Epic at a face value of Rs 10 each.
Mahajan says Feinchemie Schwebda's decision to exit from India is part of the company's worldwide strategy to quit from non-core and non-profit-making businesses. “Besides, the company wants to focus more on the European market where growth rates are higher.“
The total income of Feinchemie Schwebda for the year ended 31 March 2001 was Rs 31.3 crore with a net loss of Rs 2.4 crore compared to the previous year, says a company official. Currently the company has a 60.5-per cent stake in Epic Enzymes, Mahajan has a 4-per cent stake and the remaining 36 per cent is held by the public.