Camlin Fine Sciences Limited to raise upto INR 1,800 Mn (USD23.8million) from funds advised by Convergent Finance LLP

Camlin Fine Sciences (CFS) Ltd in its board meeting held on 25th June, 2020 has considered and approved the raising of funds of upto INR 1,800 Mn (USD23.8 million) from Infinity Holdings and its affiliated entities, with Convergent Finance LLP ('Convergent') acting as an investment advisor. Structured as a subscription to equity warrants priced based on the prevailing market price and in accordance with applicable SEBI regulations, the investment will result in an approximately 22.65% ownership stake on a fully diluted basis. Additionally, as a critical step towards aligning the interests of all shareholders, terms of the investment contemplate the institution of an ESOP for senior management/eligible employees, accompanied by a call option for the promoters. Customary closing conditions, including the shareholder approval, will apply.

The purpose of fund raise would be to consolidate and acquire the entire stake of its joint venture partners in the company's subsidiaries in Mexico and China, i.e. Dresen Quimica S.A.P.l. de C.V and CFS Wanglong Flavours Ningbo Co. Ltd., as well as to enhance the company's portfolio in Heath & Wellness segment by launching new products.

CFS Group owns 51% stake in its China subsidiary of CFS Wanglong Flavours Ningbo Co. Ltd., with the balance 49% stake owned by a local partner. In CFS Wanglong, CFS manufactures vanillin, which is a key raw material for flavours, fragrances, pharmaceuticals etc. With the growing global trade tensions in China, the company would like to de-risk itself by having the ability and flexibility to bring the technology and machinery to manufacture the same products out of India where the company also has plans to setup a facility to manufacture Ethyl Vanillin.

CFS owns 65% stake in the subsidiary Dresen Quimica S.A.P.l. de C.V.(Mexico), with the balance 35% stake owned by a local partner. Dresen Química SAPI de CV in Mexico has 11,000 sq.mt Kosher facility for production of antioxidants blends and other additives for human and feed sector. Dresen Quimica SAPI de CV with its 5 wholly owned subsidiaries in Peru, Guatemala, Columbia, and Dominican Republic, is a dominant antioxidant player in Central America. The company's Mexico subsidiary has been one of the best performing subsidiaries for CFS, and with the growing business outlook, CFS sees an opportunity to consolidate and strengthen its position in this subsidiary.

Commenting on this development, Ashish Dandekar, Managing Director of Camlin Fine Sciences Ltd., said, "We are delighted to enter into such a strong partnership with Infinity and Convergent. Especially in such uncertain times, their confidence and investment in our company will not only strengthen our position in Mexico but also reduce our reliance on China. We will also actively invest into expanding our Blends and Health and Wellness businesses which both show huge potential in the coming years. Today, more than ever, there is a heightened awareness for nutrition, food, and feed ingredients, and at Camlin we see an enormous opportunity in providing more such solutions to the consumers. We will also greatly benefit from Convergent's global network of relationships, strategic insights and operational expertise."

Harsha Raghavan, Managing Partner at Convergent, commented, "Ashish Dandekar, with over 28 years of experience in the industry, has successfully led the company to achieve its current stature, and we are very impressed with Camlin's performance under his leadership. Camlin is well-positioned to benefit from the current supply-chain disruption and the overall shift towards moving manufacturing away from China to other cost-efficient locations including India. Given our track record of working with great platform companies to help transform them into global leaders, Camlin will benefit from our network of relationships, strategic insights, and operational expertise."

Shares of CAMLIN FINE SCIENCES LTD. was last trading in BSE at Rs.49.1 as compared to the previous close of Rs. 47.8. The total number of shares traded during the day was 65725 in over 746 trades.

The stock hit an intraday high of Rs. 49.2 and intraday low of 46.05. The net turnover during the day was Rs. 3167967.

Source : Equity Bulls

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