UB Group to buy shares from Zuari to equal stake in MCFL

Vijay Mallya-led UB Group is planning to hike its shareholding in Mangalore Chemicals and Fertilisers Ltd (MCFL) by acquiring additional shares from Zuari Group, which now holds over 53 per cent stake in the fertiliser firm.

The move comes after the Zuari Group helped UB Group, the original promoter of Mangalore Chemicals and Fertilizers Ltd (MCFL), to successfully stave off a takeover bid by rival Deepak Fertilisers.

The takeover battle, however, ended with the Saroj Poddar-led Zuari Group increasing its stake in MCFL to a little over 53 per cent in MCFL with the UB Group holding around 22 per cent.

United Breweries (Holdings) Ltd (UBHL) has now decided to exercise its option whereby both the company and Zuari Group would have equal stakes in MCFL.

As per the shareholding pattern on the BSE, both Zuari Group and UB Group are in the list of promoters. Together, they have 75 per cent stake in MCFL.

While announcing the financial results of UBHL, company chairman Vijay Mallya said its board would look at exercising the option of having equal stake with Zuari Group in MCFL.

"... In terms of an agreement entered into between the UB group with the acquirer (Zuari Fertilizers and Chemicals), the UB group has an option to purchase such number of shares from the acquirer so as to equalise the respective shareholdings of both UB group and Zuari group," Mallya wrote in the 'notes to the accounts' of UBHL.

Total paid-up capital of the Mangalore Chemicals and Fertilisers comprises 88,204,943 equity shares of Rs10 each, totalling Rs88.20 crore.

Zuari Group chairman Saroj Poddar is likely to meet Mallya in the next few days. Earlier, Poddar had said he was looking forward to working with Mallya.

Earlier this month, Zuari Group had succeeded in acquiring an additional 36.56 per cent stake in MCFL, becoming a majority shareholder.

Zuari was competing with Pune-based Deepak Fertilisers for the takeover of MCFL since July 2013, but the latter withdrew from the race and has been selling shares of MCFL through open market transactions since December 2014.

Deepak Fertilisers has reduced its stake in MCFL to 5.22 per cent from 31.25 per cent in December last year.

MCFL has an urea plant near Mangalore port with an annual capacity to produce about 4 lakh tonnes of urea and about 3 lakh tonnes of phosphatic fertilisers.