The promoters of GMM Pfaudler Ltd. had to price the company's recent offer for sale at a discount to attract “high-quality” investors, according to its Managing Director Tarak Patel.
The private equity fund Deutsche Beteiligungs AG, which held 50.44% stake in the company, wanted to monetise a portion of its holding, Patel said, adding if the sale was priced higher, it wouldn't have attracted the right kind of investors.
The two promoter shareholders of India's largest maker of glass-lined reactors for pharmaceutical and chemical firms would stay put for a minimum of three years after divesting nearly 20.53% stake in the company through the offer for sale, Patel told BloombergQuint in an interview.
There will be no further transactions for three years, he said, and DBAG may sell further stake after that. But the Patel family would want to increase its holding so that they emerge as a dominant shareholder. But that would happen only after they merge their 26% holding in Pfaudler International Inc. with GMM Pfaudler, Patel said.
The offer for sale would help fund the promoter family's purchase of its stake in Pfaudler International, the company's joint venture partner, he said.
Deal Chronology:
Aug. 20 - GMM Pfaudler and Patel family buy stake in international JV partner, Pfaudler International.
- GMM Pfaudler acquires 54%.
- Patel family acquires 26%.
- DBAG retains remaining 20%.
Sept. 21 - Promoters announce offer for sale in GMM Pfaudler.
Watch the full interview here:
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