Ferguson values GFCL at Rs 63.70 a share
Business Standard, 13.06.2003
A F Ferguson & Co, an audit and consultancy firm appointed by the Andhra Pradesh government to conduct due diligence study on Godavari Fertilisers and Chemicals (GFCL), has given a peak valuation of Rs 63.70 per share of GFCL, if it is to disinvest 51 per cent holding held by both the state government and Iffco in the company.
The consultancy firm has indicated six different prices for GFCL shares based on various parameters and formulae with significant variations in the value.
However, since the state government alone is going ahead with the disinvestment of its 25.88 per cent stake in GFCL through a bidding process and Iffco deciding to keep its holding of 24.9 per cent, the Implementation Secretariat (IS) supervising the disinvestment process has asked A F Ferguson & Co to submit a fresh report on valuation of the share on the basis of 25.88 per cent disinvestment. The report is expected before July 2, the date on which price bids of the participants will be opened.
Ferguson's fresh valuation report assumes significance in view of the fact that it becomes the minimum reserve price in the bidding process and successful bidders will have to come out with an open offer to acquire another 20 per cent shares of GFCL from public shareholders as per the Sebi guidelines. GFCL shares are currently traded at around Rs 45 on BSE.
The bidding process for the disinvestment of the state government's 25.88 per cent stake was initiated on May 10 and June 21 has been fixed as the last date for the submission of bids.
So far, eight parties - Coromandel Fertilisers, Kribhco, Zuari Industries, Deepak Fertilisers, Sical, Krebs Bio, South Africa-based Foskar and Tunisia-based GCT - have registered themselves with IS for submitting bids.
According to Deepak Kumar Panwar, principal secretary of the state public enterprises department, of the eight parties registered for bidding, seven appear to be serious contenders and two foreign companies are showing keen interest for acquiring stake in GFCL. "The consultants appointed by the prospective bidders are doing due diligence from their perspective. With a keen competition already in evidence, the state government is going to be a net gainer," Panwar hoped.