Thursday, October 8, 2009

Gwalior Chemicals Update

I had earlier posted on Gwalior Chemicals at this discussing about the opportunity.

http://investingvalues.blogspot.com/2009/06/gwalior-chemicals-special-situation.html

The deal has been consummated with shareholder and regulatory approvals coming through. Except for a amount of 75-100 crores the company has received the balance amount. This amount is currently lying in a escrow account which will be released to the company on achieving some of the deliverables stated in the deal. I at this stage don’t see to much hiccups on this count.

Management had announced a board meeting on the 23rd Sept to discuss the dividend/ share buyback. However the board of directors had to make a unscheduled trip to the US hence the same has got postponed. I last spoke to Sanjeev Pathak the company secretary yesterday and the directors were still not back. According to him the board meeting should ideally happen before the 15th of October.

9 comments:

santosh said...

Thanks for the information, Mr Ninad

santosh said...

I witnessed a bulk sale of gwalior a few days back. I am just curious if they got any inside info. Do you know anything about it? Mr Ninad

Anonymous said...

Morgran Stanely sold off their stake if I read it correct. I am intrigued too.

Ninad Kunder said...

Hi Santosh

Yeah it was Morgan Stanley and they have been periodically offloading around the 100 mark.

Cheers

Ninad

Pachi said...

Thanks for the info.. it would have been better if the company keep us informed about the happenings..

Anonymous said...

Hi Ninad - I noted in Annual report that all the chemical assets - including at Ankleshwar - will be transferred.
At the end of sale, company will left with cash of 380 cr and land at Ankleshwar site. So basically at the completion of sale, return will come from cash invested in MF.

What is your exit strategy? I guess get rid of shares during buy-back??

What do you think can be buy back limit? 120? 130?

I thought of various scenarios and getting out during buy back seems logical. Waiting for company to invest the cash into productive assets seems to be too long with execution risk / uncertainty.

Thanks
Prashant

Ninad Kunder said...

Hi Prashant

Exit points could happen at various stages depending on how the market prices the event. So it could happen as soon as they announce the dividend / share buyback or could go all the way to tendering in the buyback if there is one.

There is no question of waiting for the company to invest the cash into productive assets. I would expect the buyback to be around the 130-135 mark.

Cheers

Ninad

khalid said...

Hi dude
HAPPY DIWALI to you

Anonymous said...

can any one explain why this is happening to gwalior chem. i am clueless why the price is not going up