Wheels India to be controlled by TVS Group: Official
TVS Group, the Indian promoters of automotive wheel manufacturer Wheels India Ltd., is confident of continuing to manage and control the firm post an open offer by their foreign partner Titan Europe plc and Rs.100-crore premium equity issue, a company official said.
"Post open offer by Titan Europe and public issue, the company will be continued to be managed and controlled by the TVS Group. After the equity issue, the public holding in the company will be 25 percent," Srivats Ram, managing director of Wheels India Ltd., told reporters here Friday.
He said the Indian promoters would continue to hold around their current percentage stake (49.7 percent) post the open offer and public issue.
Titan Europe, which is holding 35.91 percent stake in Wheels India, announced Thursday that it would make an open offer for 14.38 percent stake at Rs.725.38 per share of Rs.10 paid up.
According to Ram, the open offer is not a hostile takeover attempt by Titan Europe, a joint venture partner of around 15 years.
The open offer is necessitated by virtue of an international transaction involving the acquisition of Titan Europe by Titan International Inc. The offer is made to comply with the Indian takeover regulations, Ram added.
"The representative of Titan Europe attended the company's board meeting today (Friday). The board decided to come out with an equity issue of Rs.100 crore," Ram said.
According to him, the company is yet to decide the modality of the proposed equity issue - issue to the public or a qualified institutional placement (QIP) issue.
When pressed what would be the Indian promoter's holding post open offer and public issue, Ram declined to commit a number and said it depended on the response to Titan Europe's open offer and the proposed public issue.
On the likely response to the open offer, Ram said: "I personally say that the shareholders have reasons to stay invested in the company."
He said the promoters want the stock to be listed and are not for delisting.
Ram said the company would use the Rs.100-crore issue proceeds towards capital expenditure, balancing the company's debt:equity ratio and working capital needs.