Prem Watsa’s Fairfax Group and a small group of shareholders in Fairchem Organics Ltd have made an open offer to buy the stake they don’t already own in the speciality chemicals firm.
They aim to buy around 25% stake for more than Rs 194 crore (around $26.6 million), as per a filing with BSE, in a move that will give them 100% ownership.
Besides Fairfax, others making the offer are Nahoosh Jariwala Utkarsh Shah, Jariwala Tradelink LLP and Nahoosh Tradelink LLP.
This comes just a month after VCCircle reported that Fairfax India and affiliates had made a mandatory open offer that could result in the investment firm seeing its stake increase to 92.6%.
Shares of Fairchem Organics ended trading on Friday 0.05% up at Rs 596.05 apiece. Per the filing, the company reported net sales of Rs 306 crore for the 2019-20 financial year, with profit of Rs 36 crore for the same period.
Fairfax had first acquired a 45% stake in Adi Finechem Ltd for $20 million. In July 2016, it agreed to buy a 51% stake in Privi Organics Ltd for about $55 million.
As part of that deal, Privi Organics merged some of its business with Adi Finechem. Subsequently, Adi Finechem was renamed as Fairchem Speciality Chemicals Ltd.
In May 2019, Fairchem Speciality announced a restructuring to merge wholly owned unit Privi Organics India Ltd with itself. This merged entity, which housed aroma chemicals businesses, was renamed as Privi Speciality Chemicals Ltd.
The restructuring also involved creating a new subsidiary called Fairchem Organics, which housed oleo chemical and nutraceutical businesses. This rejig involved multi-layered transactions and triggered a mandatory open offer.
Fairfax India began operations near the end of 2014. In January 2015, it floated a public offering in Canada to raise $1.06 billion. It later topped up its corpus with $500 million.
The corporation holds stakes in companies across sectors including insurance, aviation, financial services, and business support services.
