Actis initiates talks to offload its stake in Punjab Tractors
UK-based private equity firm Actis is learnt to be looking for an exit option for its stake in Punjab Tractors Ltd.
According to industry sources, financial services firm Citi has been given the mandate to call bids from potential buyers for this.
Within this context, initial discussions held indicate that possible bidders may include the two largest tractor players in the country, along with a consortium of domestic and foreign investors.
The Burmans, promoters of the Dabur Group, are also likely contenders for the stake, sources said. The Burman family already holds about 14.15 per cent stake in PTL. In case they do decide to up their stake in the tractor company to beyond the 15 per cent mark, an open offer (for 20 per cent of the shareholding of PTL) would be triggered. The Burman nominee on the PTL board, Mr P.D. Narang, is also the non-executive chairman of the tractor firm.
Actis currently is the single largest shareholder in PTL with a stake of 29 per cent. The private equity firm had acquired 23.45 per cent of the stake in mid-2003 from the Punjab Government at Rs 153 per share.
Interestingly, the private equity firm was the sole bidder for the stake at the time. The PTL scrip closed at Rs 225.70 on the Bombay Stock Exchange on Friday. Actis has invested about $60 million in PTL till date. The firm’s investment was one of the first successful private equity-backed privatisations in the country.
PTL which has a dominant presence in North India, also has a 14 per cent stake in Swaraj Mazda, 33 per cent in Swaraj Engines and 24 per cent in Swaraj Automotives. Earlier this year, the tractor company had appointed consulting firm Accenture to review the firm’s strategy and organisational structure.
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