Saroj Poddar-controlled Zuari Fertilisers and Chemicals is keen to sell its 16.43 per cent stake in Mangalore Chemicals & Fertilizers (MCF) by February, which may lead to Deepak Fertilisers and Petrochemicals Corp, another stakeholder in the company, taking over the firm from Vijay Mallya’s UB Group.

While Poddar refused to comment on the issue, sources close to the Zuari camp told Business Line that the company was geared to make an exit from MCF at a handsome profit. “Something will have to happen in the next one month or so,” a source said.

Zuari acquired the stake at little over Rs 40 a share against the current market price of Rs 58 a share.

The opportunity is likely to be grabbed by Sailesh Mehta-run Deepak Fertilisers, which was eyeing on MCF to enter the Southern market. Having reached the threshold market acquisition level of 24.46 per cent stake on July 3, 2013, Deepak Fertilisers was waiting for an opportune moment to go in for an open offer.

A source close to the Deepak camp confirmed that the company is keeping a close watch on the developments.

Plan and counter plan Poddar threw his hat for MCF early last year, based on an understanding with Mallya to acquire the UB group’s 22 per cent stake (nearly 10 per cent of which is pledged with lenders) in MCF through a “friendly” deal. The plan, however, underwent a change beginning September.

First, Mallya dragged his feet on losing control over MCF, and announced his desire to buy back the holdings of “Saroj Poddar or Sailesh bhai” in the fertiliser company.

Poddar set a December 2013 timeline for Mallya to make up his mind. “We will give him (Mallya) time, till December, to make up his mind… I will not force him to divest, but sell shares to the highest bidder,” Poddar told Business Line in September.

Court spanner But before either Mallya or Poddar can take the agenda forward, in an interim order, the Karnataka High Court debarred United Breweries Holdings (UBHL) from transferring the possession of any of its assets (including MCF).

And, in its verdict in December, the court declared UBHL’s sale of stake in a group outfit (United Spirits) to UK-based Diageo Plc as void. The transaction was cancelled on the ground that the British company knew about the winding up petitions against UBHL before buying the shares.

UBHL is the holding company of the UB Group as well as MCF and is now facing a winding-up petition from lenders to troubled Kingfisher Airlines.

While Mallya will contest the High Court order, the judgments has put a question mark on UBHL’s ability to either sell stake or increase holdings in MCF, as lenders might want Mallya's holding company to use those funds to partly clear the debt.

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