Omkar Speciality Chemicals Ltd -- OSCL


(rahulparekh22) #847

Does anyone have their assumptions or a fair idea about what PE and price should Lasa list at?


(viveksingla) #848

While it might not mean anything and is a normal course of corporate life. But Mr. Pravin has always been regarded as a helpful and nice person. He always responded with “happy to help” attitude.

http://www.bseindia.com/xml-data/corpfiling/AttachLive/ef12e066-c38d-429f-91c8-bddcb0161703.pdf


(Pdshah) #849

LASa audit report with notes

http://www.lasalabs.com/cs-pdf/LSL%20Audit%20report%20&%20Financials_2016-17.pdf


(sta) #850

Could you clarify your statement. I could not understand it.


(Ritesh) #851

Omkar is fixing all its capital structure problems -

  • Fired its CFO (presumably the person in the helm of bad capital structure)
  • 110 cr debt transferred to Lasa (out of total debt of 218 cr before spin-off). Along with the transfer of plant V
  • Of the remaining 108 cr in Omkar books, 60 cr is promoter debt which will be converted into equity post right issue
  • Remaining 48 cr external debt with Omkar - probably this will be paid by rights issue money raised. Even if this debt remains unpaid, it is a very small amount in the face of Omkar EBITDA (> 60 cr) and bloated equity book value (>270 cr post right issue)
  • Enough cash to go for acquisitions and they have shown that they are smart in acquiring business and creating value
  • Hopefully management learned a lesson to stay away from debt/share pledges from now on! Time will tell!

You guys agree?

Invested


(sumitg04) #852

I think market will wait for Lasa listing and then Right issue announcement. What and when management is going to do with Debt is something that many are looking from the fence. As per the last con-call, Lasa was supposed to be listed by June end, however, there has been no update till now. Lets hope there is some communication on this soon.


(Pdshah) #853

Never knew removing of CFO can have such a positive effect on price :slight_smile:


(sumitg04) #854

Was it just because of removing the CFO, or there is some better news/update that the common shareholders are still unaware of.


(Pdshah) #855

There should be definitely something. Maybe an announcement on rights issue
coming soon.


(csteja) #856

What is the conversion price ?

How you got 270 book value. What are your assumptions, can you clearly mention ? Even 1:1 rights at 100 and after promoter debt converted to equity, BV will be nearer to 100 (yet, <100)


(Ritesh) #857

For my above comments, conversion price is not needed. All my numbers are based on this article -

I have assumed that they will do rights issue of 150 cr, lower end of 150 to 200 cr which Mr. Pravin said in the article.

Current BV is c. 120 cr and rights of 150 cr (rights money to be raised) = 270 cr.

thanks

Invested


(csteja) #858

Total shares currently = 2.05 cr
Promoter conversion price assumed at 150 pre-merger. Hence the equity dilution for 60 cr will be (considering there are 2.05 cr shares) = ~20%
Hence total shares after conversion = 2.05 + 40 L = 2.4 cr

Current book value = 120 cr
Current BV per share = 120 / 2.4 = 50

Money raised through rights issue at share price of Rs. 100 = 150 cr ==> Issue might be raised at 5:3 (
Money added to book value from rights issue = 130 cr. (after removing 20 Cr for shareholder reserves)
Total book value after rights = 120 cr + 130 cr = 250 cr
Total shares after rights = 2.4 cr + 1.5 cr (60% dilution) = 4 cr

BV per share = 250 cr /4 cr = 62.5

These calculations are just for learning purpose (projections). Let me know if I miss something.

Disc : Not invested.


(tankerooooo) #859

These calculations exercises are not useful. Odds of a successful large rights issue of 150-200 cr at 100/share is very less. No one will subscribe to a large rights offering unless it is at a discount to market price.


(VK) #860

Very messy capital allocation and capital rising… sometimes pledging… sometimes conversion… sometimes rights issue… too chaotic…


(vivekp) #861

Don’t think rights issue is on anvil immediately . Promoter doesn’t have that much cash to subscribe rights otherwise why so much mess of depledge ,pledge would have happened ?


(Bhaskar Jain) #862

Promoter will convert his interest free loans of 60 cr to equity via rights issue. This has been clearly reiterated by them multiple times.


(sumitg04) #863

Not sure this news is based on the latest interview

Correction: there is an exchange filing as well on the above:
http://www.bseindia.com/corporates/anndet_new.aspx?newsid=95a25461-7ae1-4e70-8afa-a460f4accbe2


(vinay ambekar) #864

During the saga of promoter share sales (in last year) , if we remember, promoters had emphasised the merits of selling their shares to release the pledged shares, as a better option for minority shareholders, rather than going in for a preferential allotment or QIP, which would have diluted minority share holding.

The money after repaying the nbfc loans (that were backed by pledged shares, has been lent to the company as interest free loans. And now, this is proposed to be converted into equity through rights issue. If minority shareholders do not participate in the rights issue proportionately, the shareholding of the promoters will increase, with no new money being added by them. They may keep the issue price very low which will benefit them even further.

Had they infused the money as equity (rather than promoter loan) they would have got lesser no. of shares, because issuing equity at below the then market price would have been perceived negatively. And, now they can issue shares to themselves at low price under the pretext of rights issue.

Ofcourse, above is all conjecture, and I may very well be proved wrong if the rights issue is indeed at higher price, in which case it may not find much takers from general public.

PS - promoters in their concalls had mentioned that their loans to the company were at 12.5% compared to nbfc loans of 18-20% (secured by pledge of shares). Hence one needs to be sure that the loans are indeed interest free, which they have claimed subsequently.

Discl - no holding. sold long back as mentioned in earlier posts.


(Dhiraj Dave) #865

What is interesting is no one is even referring to Flavour and Frangrance product which company intend to launch with precise EBITDA margin and Sales growth for FY19. Even both anchors body language was kind of disbelief when the promoter give indicative sales and EBITDA margin for these product. It seem the promoter have great control over future business propsect, however, they do not have any clue on current financial issues.
Discl: No investment, but could not resist to write after watching the interview and no one even referring the same on thread. I am find that very interesting.


(sta) #866

Which interview is this?