UK-based hedge fund Spinnaker has sold 3% stake in cement and clinker maker Sanghi Industries through a market sale for around Rs 21 crore ($4.4 million). Spinnaker through three separate funds had acquired around 25% stake in the firm over four years ago and as per VCCircle estimates it has encashed with a little over 2x returns.
Spinnaker had originally acquired around 14% stake from Fuller International in December 2005 for around Rs 25 crore and soon thereafter hiked stake to 25% through a preferential allotment where it bought additional shares at Rs 18.5 per share. It had also made an open offer to acquire more shares but didn’t find many takers. Its average cost of acquisition works out to be around Rs 14.5 per share.
Spinnaker’s three funds sold 3% stake at an average price of Rs 31 a piece or a little more than double the price in its four-year-old investment. Spinnaker continues to own around 17% that is valued at around Rs 100 crore. Spinnaker had sold some stake between October and December last year when the share price was hovering at a similar level of Rs 27-37.
Sanghi Industries Ltd has a 2.6 million tonnes per annum lignite based cement plant at Kutch district in Gujarat that was set up with technology support from US-based Fuller International. For the year ended March’10, the company had annual revenues of Rs 665 crore(down 17% over the previous year) and net profit that halved to Rs 27 crore over the previous year.
The company has a market cap of around Rs 600 crore saw its share price crash 4.9% on Wednesday after Spinnaker sold its stake the previous day.
Spinnaker had last year reportedly held talks with another fund besides a multinational cement maker to sell its stake in Sanghi Industries. The transaction was apparently pending the Sanghi family internal dispute where four brothers were in contention to take over the reins of the firm.
Spinnaker Capital was reportedly looking at its global investments after Lehman Brothers declared bankruptcy two years ago. The US investment bank had picked a large minority stake in the hedge fund in January 2007.