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January 24, 2017

Volume 7 Issue 8

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Tide Water Retains Control under Standard Greases

Standard Greases & Specialties Ltd. had intended to gain control of the Andrew Yule Group-managed Tide Water Oil Ltd. upon becoming its largest shareholder last year, but to date it has cooperated with existing management to focus on the growth of the company.

In September 2015, Mumbai-based Standard Greases, along with Janus Consolidated Finance Pvt., Alpha TC Holdings Pte., and Tata Capital Growth Fund, made an open offer to pay up to Rs 377 crore (Rs 3.77 billion or U.S. $57 million) for a controlling stake of 226,512 shares of Tide Water stock. Standard Greases later increased the per-share price of its offer, boosting the overall value of the bid to Rs 397 crore.

When the offer closed on Dec. 30, 2015, Standard Greases’ and Janus’ combined shares amounted to 29.38 percent, making the company Tide Water’s largest shareholder. Based on Standard Greases’ 27.69 percent of shares, and Janus’ 1.69 percent, Tide Water’s board decided to call each a co-promoter, with two representatives on the board as of March 2016.

But day-to-day management of the company has remained unchanged to date, according to Tide Water and market observers.

Priyank Chandra, a research analyst with Dolat Capital Market Pvt., told Lube Report Asia that it’s possible that Standard Greases compromised its ambition to manage Tide Water for the benefit of the latter. “Standard Greases seems to have realized that they need key men for growth of the company, so they are carrying on with the same team in the larger interest of the company.”

Chandra said Tide Water’s board of directors, which includes Standard Greases’ founder and managing director, Vinod S. Vyas, has reappointed and extended the term of Tide Water Managing Director, R.N. Ghosal, through Feb. 28, 2019. Chandra suggested that this proves that Standard Greases has put faith in the Tide Water management.

Chandra also noted Tide Water has the tacit backing of the central government, as state-owned insurance companies, Life Insurance Corp. and United India Insurance, still own 4.22 percent and 6.88 percent of the company, respectively. 

Tide Water’s Ghosal told Lube Report Asia that there is no issue regarding the company’s administration and noted that management has remained unchanged since before Standard Greases’ involvement. Ketan Vinod Vyas, another managing director at Standard Greases, declined to comment.