The share price of Bharati Shipyard surged 10 per cent on Monday, two days after the company announced it would make an open offer to acquire an additional 20 per cent stake in 25-year-old offshore services firm Great Offshore, whose promoters have shed control.
Bharati Shipyard shares closed at Rs 167, up 9.9 per cent while Great Offshore shares closed at Rs 374, up 2.7 per cent on the Bombay Stock Exchange.
Bharati, which had lent money to Vijay Sheth, promoter of Great Offshore to meet financial obligations towards pledged shares, recently acquired a 14.9 per cent stake in Great Offshore when its promoter and managing director Vijay Sheth could not payback the dues. Bharati had acquired the shares for Rs 315 each. On Saturday, Sheth stepped down after his holding came down to less than one per cent.
In June 2007, Sheth had pledged his entire holding of 15.5 per cent in Great Offshore with IL&FS and Motilal Oswal to raise funds. After the markets crashed last year affecting the share price of Great Offshore, Sheth was asked to cough off additional money towards margin call. This had forced him to borrow from Bharati Shipyard. This is one rare example of a promoter shedding control of his company due to depletion in share price and lack of financial muscle to regain pledged shares.
The date and price of open offer is yet to be finalised. Going by the takeover rules, the open offer price would be between Rs 315 and Rs 330 per share, much below Great Offshore's current market price.
{{/usCountry}}The date and price of open offer is yet to be finalised. Going by the takeover rules, the open offer price would be between Rs 315 and Rs 330 per share, much below Great Offshore's current market price.
{{/usCountry}}Bharati Shipyard’s managing director PC Kapoor told Reuters that Great Offshore’s current management would run the company independently.