The Telegraph
Since 1st March, 1999
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Sardas’ public offer for BSL postponed

Calcutta, Sept. 24: The Sardas’ public offer to acquire 30 per cent in textile major BSL, scheduled to open on September 30, has been postponed as the Securities and Exchange Board of India (Sebi) is yet to clear to the offer.

Officials of Kolmak Chemicals—the Sardas’ flagship company—today said the market regulator would set a new schedule when it gave its approval to the offer, and its opening was likely to be deferred by “about 10 days”.

The promoters of BSL brought a number of irregularities in the draft offer document to the notice of the stock market regulator, and have sought cancellation of the bid. They have also alleged that Kolmak Chemicals did not send them a copy of the offer document in time for them to consider a counter-bid.

“Sebi has asked our merchant banker, SBI Capital Markets, to respond to the issues raised by the BSL management. We have taken legal opinion on the matter and will soon send our response to Sebi,” a senior Kolmak Chemicals official said.

Sebi is unlikely to give its clearance to the offer until the Sardas have clarified the issues raised by BSL. Though Kolmak Chemicals has so far received only one set of queries, they may have to address many more.

BSL promoter-director Ravi Jhunjhunwala said they had raised several issues. “We wrote a letter to Sebi even on Monday pointing out irregularities,” he said. Kolmak Chemicals, however, maintains that there are no significant errors in the offer document.

While the Sardas are pushing hard for Sebi’s clearance to their open offer, the promoters of BSL—the Churiwals and Jhunjhunwalas—are increasing their shareholding in the company. BSL had informed the stock exchanges on Monday that the promoters had raised their holding to 39 per cent by way of creeping acquisition.

Jhunjhunwala said the promoters had bought more shares from the market today, and their holding has nearly reached the 40 per cent mark. The promoters will continue to buy shares from the market, and increase their control by at least another 2 per cent by the end of this month.

The Sardas have acquired close to 12 per cent of BSL’s shares from the market and are now pitching for an additional 30 per cent. The success of their offer depends largely on the participation of banks, insurance companies and overseas corporate bodies, which have a combined holding of around 15 per cent.

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