"Dubai co likely to acquire 15% stake in GHCL "

DUBAI-BASED Al Rostamani group is expected to buy 15% stake from the promoters of GHCL as a part of a larger transaction which could result in the Middle East group owning a little more than one third of the flagship company of the Sanjay Dalmia group. The deal, including the mandatory open offer will be triggered as part of the transaction, which is expected to cost anywhere between Rs 550-690 crore.

According to sources, the deal would involve stake sale by the promoters of GHCL which would bring down their direct holding in the firm to around 32%. If the open offer is fully subscribed then Al Rostamani group will own close to 35% in GHCL. However, besides direct holding there are other shareholders associated with the company including an employees trust which if added will allow GHCL promoters to remain the largest shareholder.

A GHCL spokesperson declined to comment on the developments. However, in response to an ET report on June 11 about Al Rostamani group picking up a substantial stake in GHCL, the company had informed the stock exchange: “The company is an expanding organisation and exploring growth opportunities organically and in-organically both. As a sequel to this effort, we keep examining various proposals for funding requirement. Any specific proposal till it is finalised cannot be commented upon.”

According to sources, the promoters are negotiating for a deal value which could be close to the FCCB issue made in September 2005. The price for the FCCB issue was fixed at Rs 197 per share in 2006. If the deal is struck at this price Al Rostamani will have to fork out around Rs 690 crore to get 35% stake in GHCL. The final transaction, could be struck at a price range of Rs 160-200 per share or even lower.

Even at this price range the deal would be at a substantial premium to the current price of GHCL which is hovering around Rs 72, after jumping 50% over the last one week. Insiders say, the promoters are in no mood to cede control of the company and the move is part of a fund raising exercise for other expansion plans which could involve bigger acquisitions.