Don't intend to enter bidding war on Mangalore Chem: Zuari

Zuari Fertilizers has no plan to change stake in UB Group firm Mangalore Chemicals and Fertilisers (MCFL) in which the former has 10 percent holding.

The firm had acquired 8 per cent stake from a State Bank of India group entity and the rest from the open market in April this year.

In an interview to CNBC-TV18, HS Bawa, executive vice chairman, Zuari Agro Chemicals  said that his firm has no intention to enter any bidding war on Mangalore Chemicals.

His statement follows the news of Deepak Fertilisers and Petrochemicals purchasing a stake of little lower than 25 percent in MCFL for Rs.180 crore.

Bawa further said that his company also does not have any plan of hostile takeover of MCFL either.

Read This: Deepak Fertilizers up 4% on stake buy in Mangalore Chemical

Below is the edited transcript of his interview with CNBC-TV18:

Q: Now that you have a 10 percent stake and there is a second player who has acquired a higher stake in the company, what do you plan to do with your investment?

A: We have no plans at all. We have acquired 10 percent and after that we haven't traded in the share at all. So whatever is happening in the market, you and I know the same things from reading in newspapers. So I cannot comment more on this.

Q: Would you not want to increase your stake?

A: I cannot comment on that. As I said we haven't traded in the share after acquiring 10 percent.

Q: Is there any bidding war that could be likely in your mind?

A: We have no such plans.

Q: To your knowledge are there more people willing to sell large blocks of Mangalore Chemicals and Fertilisers?

A: I don't know.

Q: If there were sellers are you an interested buyer?

A: We invested in the stock as we thought it was a good investment. Beyond that we haven't done anything. And we have no such plans of any hostile takeover.

Q: So for now you will be sticking with your 10 percent stake itself?

A: Yes at the moment we have 10 percent and that is it.

Q: Does it entitle you to a seat in the board?

A: No we haven't discussed anything like that.

Q: If in due course of time the management does decide that they might want to hike their stake, can you afford to do that? Do you have enough cash because the debt of the company is still quite high?

A: We haven't examined the issue in detail, we have no such plans.

Q: But is it a good investment to hold with just 10 percent, do you see a turnaround in the stock?

A: It could be.