German development financial institution DEG has sold a quarter of its 3.5% stake in the country’s largest paper producer Ballarpur Industries (Bilt) with an estimated 30% return after picking the shares almost three years ago.
DEG had picked around 4% in Gautam Thapar-led Bilt in June 2007 after converting foreign currency convertible bonds (FCCB) worth $15 million. Its, holding that has shrunk in percentage terms with other equity issue by company, stood at 3.5% as of June 30, 2010.
As per VCCircle estimates, its average cost of acquisition of shares is pegged at Rs 28.7 per share. It sold 5.6 million shares in the open market at a price of Rs 37.27 per share, netting Rs 20.8 crore and its remaining holding is worth Rs 65.5 crore ($14.7 million).
Another investor IFC, that also subscribed to the company’s FCCBs in 2003 investing $15 million, also picked a similar stake in Bilt three years ago by converting the bonds into shares. The private sector investment arm of the World Bank whose cost of purchase is also pegged at the same level as DEG, a small quantity of shares in April-June quarter early this year when the share price was quoting in Rs 25-38 per share.
This comes even as Bilt is in the process of taking its Dutch unit Ballarpur International Graphic Paper Holdings BV (BIGPH) public. The group has been exploring a Singapore or London listing for a while targeting a valuation of over $1 billion and had even appointed merchant bankers for the proposed issue. This unit has investments from JP Morgan and GIC who invested $175 million together in 2008.
The group recently also raised money from KKR for the power arm Avantha Power & Infrastructure that is floating its initial public offer in India.