Wheels India Limited, the market leader in the wheels business and part of the TVS group, on Friday said it will continue to control and manage the company with equal shareholding structure despite an open offer being made by Titan Europe, which currently holds 35.91%.
The company has decided to go public again to meet Sebi’s deadline for listed companies to have at least 25% of equity held by non-promoters to raise R100 crore on or before June 2013.
Wheels India managing director Srivats Ram said: “By virtue of an international transaction involving the acquisition of Titan Europe by Titan International, it is required to make an open offer to the public shareholders of Wheels India under the Indian takeover code. A public announcement has been made by Titan Europe and Titan International to acquire further 14.38% from the public on December 13. This is only a statutory requirement for the foreign partner to make an open offer.”
He, however, said at Friday’s board meeting that Titan senior officials assured Wheels India management that they will continue to be partners and ensured the existing management will continue to control and manage the operations, whatever be the outcome of post open offer.
Ram said, “We hope that post open offer and public issue, there going to be no significant change at the management level and both the companies expect to have equal shareholding structure. It is remained to be seen how the shareholders respond to the open offer being made by Titan Europe and then only things will emerge.”
Currently the promoters — TVS group companies — hold around 49.7% and Titan Europe holds 35.91%, Reliance Capital holds around 3.83% and the rest with common public and corporate bodies.
Ram said the company will come out with a public issue to raise R100 crore, parimarily to meet the working capital requirements and to retire small portion of debt, which is pegged at R400 crore now. The company expects to dilute 5% through this issue. The fundraising is to meet the fresh capital requirements and will also help the company to meet Sebi’s deadline for listed companies to have atleast 25% equity held by non-promoters. The fundraising could be through QIP, IPP or other modes, which yet to be decided.
Once the open offer by Titan Europe goes successfully, the shareholding of Titan Europe would go up to 50.29% in the company, while the Indian promoters, including TV Sundaram