PUBLIC ANNOUNCEMENT TO THE SHAREHOLDERS OF

SHIN HO PETROCHEMICAL (INDIA) LIMITED

 

Corrigendum to Public Announcement (PA), which appeared in this newspaper on March 24, 2006

 

This Announcement (“Announcement”) is being issued by Stratcap Securities (India) Private Limited, the Manager to the Offer, on behalf of Supreme Petrochem Ltd (referred to as “the Acquirer”) and in continuation of, and should be read in conjunction with, the original Public Announcement (“PA”) dated March 23, 2006 and published on March 24, 2006 to the shareholders (“Shareholders”) of Shin Ho Petrochemical (India) Limited (“SHPIL”).

 

1.            In Para 2 - The Offer Price: The shares of SHPIL are listed on the Bombay Stock Exchange Limited and the Madras Stock Exchange but traded only on the Bombay Stock Exchange Limited. Details of the total number of shares listed and the annualized trading turnover are as follows:

 

Name of Stock Exchange	Total no. of shares traded during the 6 calendar months prior to the month in which PA is made	Total No. of listed shares	Annualized Trading Turnover (in terms of % to total listed shares)
Bombay Stock Exchange	13,08,770	1,17,96,000	22.19
Madras Stock Exchange	NA since no trading

(Source: www.bseindia.com)

 

Offer Price Determination

 

The shares of SHPIL are deemed to be frequently traded at BSE in terms of Regulation 20(5) of the SEBI (SAST) Regulations, 1997. The Offer Price in terms of Regulation 20(4) of the SEBI (SAST) Regulations, 1997 has been determined taking into account the following parameters:

1.             Negotiated price	Rs 3.85
2.             Highest price paid by the Acquirer for acquisition including a public or right or a preferential issue during the period of 26 weeks prior to PA	NIL
3.             Share price data of SHPIL on BSE, where it is frequently traded, is as under:
a)             The average of the weekly high and low of the closing prices of   the shares of SHPIL during the 26 weeks preceding the date of announcement	Rs 5.74
b)             The average of the daily high and low of the closing prices of the shares of SHPIL during the 2 weeks preceding the date of announcement.	Rs 5.01

 

The shares of “SHPIL” have also been listed on the Madras Stock Exchange Limited and where it has not been traded during the preceding six calendar months prior to the month of Public Announcement. Therefore, so far MSE is concerned, the shares of SHPIL are thus deemed to be infrequently traded in terms of Regulation 20(5) of the SEBI (SAST) Regulations, 1997. The Offer Price in terms of Regulation 20(5) of the SEBI (SAST) Regulations, 1997 has been determined taking into account the following parameters:

i.	Negotiated price under an agreement as referred to in sub-regulation (1) of Regulation 14 of SEBI (SAST) Regulations, 1997	Rs 3.85/-
ii.	Price paid by the Acquirer for acquisition including by way of allotment in a public or rights or preferential issue during the twenty-six week period prior to the date of this public announcement	There has been no acquisition by the acquirer during the said period of 26 weeks
iii.	OTHER PARAMETERS:	Year ended 30.06.2005 (Audited)	Period ended 31.12.2005 (Certified)
	Return on Net-Worth (%)	(23.95)	(51.29)
	Book Value Per Share (Rs.)	5.45	3.60
	Earning Per Share (Rs.)	(1.31)	(1.85)
iv.	The P/E multiple in this case is not applicable in view of the Earnings Per Share being negative for the year ended 30.06.2005 and also period ended on 31.12.2005.	Not Applicable

 

Since the shares of SHPIL are frequently traded on the BSE and infrequently traded on MSE, the Offer Price of Rs. 5.85/- per share is the highest as per above-mentioned criteria, in the opinion of the Manager to the Offer and Acquirer, the Offer Price of Rs. 5.85/- is being justified in terms of Regulation 20(4) of the Takeover Regulations.

 

2.            In Para 4 - Information of the Target Company - Shin Ho Petrochemical (India) Limited: The Company is promoted by S H Chemical Co. Limited, Rep. of Korea (formerly known as Shin Ho Petrochemical Co Limited, Korea), Nava Bharat Ferro Alloys Limited, Beardsell Limited and Tamil Nadu Industrial Corporation Limited (TIDCO). These promoters have promoted SHPIL as individual promoters and there is no arrangement or agreement amongst the present promoters except with TIDCO. S H Chemical Co. Limited, Rep. of Korea has given an undertaking to TIDCO accepting the terms in respect of appointing TIDCO’s representative as nominee director and first right of refusal in case either party desires to sell its holding in SHPIL. Beardsell has already disposed off its holding during financial year 2005-2006. S H Chemical has now executed SPA with the Acquirer to sell 64,87,800 equity shares representing 55% of the total paid-up equity share capital of SHPIL. The remaining promoters, not being a part of SPA, are eligible to tender their equity shares in present offer. After closure of the offer, these promoters will no longer be promoters of SHPIL and the remaining shares, if any, will form part of public shareholding.

 

3.            In Para 5 - Purpose of Acquisition, Offer and Future Plans about the Target Company: The Acquirer is mainly in the production of Polystyrene and Speciality Polystyrene and has identified the Target Company, which is in the business of manufacture, distribution, marketing of Expandable Polystyrene Resin. The Acquirer intends to expand the current business by adding an additional product i.e. Expandable Polystyrene Resin to its existing line of product in order to diversify business risk. With the acquisitions of shares coupled with management control of the Target Company, it shall be able to utilize its own marketing capabilities to better position the product in the market and tap necessary synergies by combination of the businesses. SPL’s priority for Target Company is to turn around by ensuring continuous operations of the plant at near nameplate capacity and in future to increase the installed capacity to obtain economies of scale. SPL shall infuse working capital whenever necessary for ensuring continuous operations.

 

4.            In Para 10 (Time Schedule of the Offer): There has been revision in the Last date up to which Shareholders may withdraw and accordingly, the revised date is May 31, 2006 (Wednesday) instead of May 30, 2006 (Tuesday).

 

5.            Other Disclosures:

 

a.       Disclosure in Terms of Regulation 16 (ix): The Acquirer shall ensure compliance with Regulations 21(2).

 

b.      The Acquirer has not acquired any equity shares of SHPIL after the date of public announcement till the date of letter of offer. If the acquirer acquires equity shares after the date of Public Announcement up to 7 working days prior to the closure of the offer at a price higher than the offer price, then the highest price paid for such acquisition shall be payable for all the valid acceptances received under the offer.

 

 

6.            The Acquirer accepts full responsibility for the information contained in the Letter of Offer. The Acquirer is responsible for ensuring compliance with the Regulations.

 

 

 

7.            The Corrigendum to Public Announcement would also be available at SEBI’s website, www.sebi.gov.in.

 

	MANAGER TO THE OFFER
	STRATCAP SECURITIES (INDIA) PRIVATE LIMITED Strategic House, 44, Mint Road, Fort, Mumbai–400 001. Tel.: (022) 66349946-49 Fax: (022) 22642393 Email: info@strategicindia.net, Contact Person: Anil Bhattar

 

Place: Mumbai

Date: May 3, 2006