Gateway Distriparks to acquire Snowman Frozen Foods Ltd

Gateway Distriparks Ltd has announced that the Board of Directors of the Company at its meeting held on November 22, 2006, has considered and approved the acquisition of 50.10% of the total paid up equity capital of Snowman Frozen Foods Ltd ("Snowman"), an unlisted public limited company having its registered office at Cochin, Kerala and principal place of business at Bangalore, for a net cash consideration of Rs. 48.12 crores (the “Investment”) by:

(a) subscription to 34,390,000 new equity shares of Snowman at a price of Rs 10.50 per share; and

(b) purchase of 6,861,000 existing equity shares of Snowman at a price of Rs 17.50 per share from Amalgam Foods Ltd. Amalgam Foods Ltd will continue to remain a shareholder of Snowman holding an aggregate of 1.21% of the post issue total paid up equity capital of Snowman.

In addition to the above, the Company may cause a third party to subscribe to and / or purchase up to five percent of the post issue total paid up equity capital of Snowman such that the third party exercises its voting rights in accordance with the instructions of the Company.

Snowman is engaged in the business of cold chain logistic services on a nation wide basis through its comprehensive facilities for storage, handling, refrigeration, transportation and secondary distribution of chilled and frozen foods. As the business of Snowman is analogous to the business of Company, the Investment will assist the Company in expanding the scope of its operations.

To give effect to the Investment, the Company will enter into a share subscription and shareholders agreement with Snowman and its present shareholders, Mitsubishi Corporation, Mitsubishi Logistics Corporation and Nichirel Logistics Group Inc., all companies incorporated in Japan, who will continue as substantial shareholders of Snowman with an aggregate 48.69% shareholding in Snowman. This agreement may also provide for transfer restrictions on the shareholding of the parties to the agreement.

Rabo India Finance Ltd is the exclusive strategic and financial advisor in connection with the Investment.

The Investment is subject to necessary approvals of the shareholders of Snowman, applicable statutory and regulatory approvals, and approvals of Snowman’s lenders pursuant to its financing documents.

The board of the Company has authorized certain individuals to finalize and settle the terms of the documents required to be executed and to do all acts and deeds necessary to give effect to the Investment.

Source : Equity Bulls

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