Actis mulls exit from Nilgiri dairy
Bangalore, Jan 30: As the internal disputes between private equity major Actis and the original promoters of Nilgiri Dairy farm moves beyond repair, Actis is considering an exit, VCCircle report said.
According to sources the fall-out between Actis and the founding Mudaliar family, could make the way for Serial investor and Sterling Infotech Chairman C Sivasankaran as a possible contender to buy the 65% stake of Actis, as he is considered as favorable candidate to the investors.
Actis is believed to be mulling with an early exist owing to fallout with some of the minority shareholders, including an irretrievable situation.
However, the private equity firm has refused to comment on the reports of its possible exit, including its ongoing conflict with minority shareholders.
"It is not our policy to comment on speculation. Hope you understand our position," said Actis MD JM Trivediin response to an email by VCCircle.
Bharti Group, India's largest conglomerate, who has reportedly shown interest in Actis in the past is likely to grab this opportunity, as it can boast up its operation in the domestic market.
Actis' possible exit, could also draw the attention of other corporate houses like AV Birla (operating in retail under 'More' brand) and Reliance Retail who are waiting to expand its operation in the domestic retail scenario.
Following the conflict, Mudaliar family shareholders has reportedly increased the ante within 18 months of the internal disputes.
According to sources the founding member are looking for a white knight who would support their decision to buy back the company's stock.
Trouble between the shareholders of Nilgiri began to surface when a Rs 35 crore rights issue proposed by the management under Actis was approved by the company's board of directors in Nov 2009.
The difference between Actis decision to cash in more funds for future expansion and some founding family shareholders, currently led by Prabhu Ramachandran, along with the opposition that the company cannot proceed with an issue without agreement on valuation, resulted in the issue being dragged to Company Law Board (CLB) of Chennai.
The CLB instructed the company management to hold the rights issue till further notification in Jan 2010.
The other bone of contention between Actis and the founding family was the sale of the company's real estate assets in Bangalore, Chennai and Avinashi in Tamil Nadu.