Poddar may tweak pact with Mallya for retaining control of Mangalore Chemicals

Adventz Group controlled by Saroj Poddar may tweak the agreement with UB group chairman Vijay Mallya for the management control of Mangalore Chemicals and Fertilizers Ltd if the ‘wilful defaulter’ tag remained on the liquor baron, Kolkata-based industrialist Poddar has said.

This comes amid talks of Deepak Fertilisers and Petrochemicals Corp Ltd upping the stake in its hostile takeover bid for the public listed company.

Poddar had come as a white knight to Mallya and had joined hands to make an open offer to acquire 26 per cent stake on Mangalore Chemicals from public shareholders, in order to stave off a hostile takeover bid for Mangalore Chemicals from Pune-based Deepak Fertilisers.

As per the pact between UB group and Zuari Industries, Mallya would remain chairman on the board of Mangalore Chemicals if they jointly succeed to acquire controlling stake via open offer. The pact also allows Mallya to appoint three directors on its board.

However, the United Bank of India’s decision to name Mallya, along with directors of Kingfisher Airlines namely Subhas Gupte, Anil Kumar Ganguly, Ayani Kurassi and Ravindranath Nedungadi, as wilful defaulters, after the grounded airline failed to pay Rs 400 crore of loans, has complicated the matter.

Although the joint bid partnership is not being reconsidered the terms of the pact may be changed.

“The situation remains unchanged as (status of) wilful defaulter is irrelevant as far as my agreement with Mallya over Mangalore Chemicals is concerned....we continue to remain interested and that position remains unchanged," Podder told reporters on the sidelines at the AGM of Texmaco Rail and Engineering, an Adventz Group company.

But if Mallya fails to remove the wilful defaulter tag, Poddar will have to look for people outside the UB group to get nominated in the board to continue to retain the management control of Mangalore Chemicals.

As per norms, wilfully defaulting directors should not be on the board of the companies and shouldn't be inducted in the board of any firm in future.

Meanwhile, the Business Standard reported citing sources that Deepak Fertilisers has decided to revise open offer price to gain management control of Mangalore Chemicals.

Earlier in May, Deepal Ferltilsers made an unsolicited open offer, increasing its price for a 26 per cent equity stake in Mangalore Chemicals to Rs 63 per share from its previous offer of Rs 61.75 per share to take over the company.

Following this, Zuari Fertilisers and Chemicals partnered with United Breweries (Holdings) Ltd and its associates Kingfisher Finvest India Ltd and McDowell Holdings Ltd to make a counter open offer to buy 26 per cent stake in Mangalore Chemicals from the public shareholders of the company at Rs 68.55 per share.

Currently, UB Group owns a 22 per cent equity stake in Mangalore Chemicals, Adventz group's Poddar holds 16.43 per cent stake and Deepak Fertilsers owns 26.1 per cent.

Poddar was seen as a white knight to protect Mallya’s hold over the company given that much of promoter holding was pledged with institutions.

The Competition Commission of India (CCI)has already cleared Deepak Fertilizers' proposed additional stake buy in Mangalore Chemicals.

(Edited by Joby Puthuparampil Johnson)

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