ET Now In an interaction with ET Now, Bhavin Shah, Independent Director, Adi FineChem, talks about the stake sale by promoters of the company to Prem Wasta-led Fairfax and the sussequent open offer.
ET Now: After the Fairfax open offer, how will life change for the company?
Bhavin Shah: As such there is no immediate management change. Mr. Nahoosh Jariwala who has been running the company continues to run the company. There is no immediate change in the board as well. The company gets a very strong financial partner, which can be very important for future expansion plans that the company may have.
ET Now: Tell us a little bit more about what does Adi Fine Chemical actually do? We understand it is a speciality chemicals business, but if you could give us some more details on what the business details are like?
Bhavin Shah: Right. The company processes basically vegetable oil fats and produces some intermediate chemicals that are used in a very wide range of industries, and in many cases there are very few competitors that the company has.
One of the industries that the company supplies is to also paint, for example, and there are opportunities for the company to also do some forward integration into more higher value added products.
ET Now: Do you have an existing relationship with the Fairfax group directly or indirectly, when I say you and the company?
Bhavin Shah: As far as Adi Finechem, I think this is a new relationship as far as I understand.
ET Now: I completely understand. I was looking at the quote given by Prem Watsa as well wherein he is saying that he is looking forward to the growth continuing under the leadership of Nahoosh Jariwala as well, but if they are taking 45% and assuming that at some point of time if a part of this open offer is also successful which means that they will probably have holding over 50%, there would be some change to the board or the management as well, right?
Bhavin Shah: That is a question that Fairfax can address the best.
ET Now: Any sense about the growth trajectory in Adi Finechem as well because I was just looking at what they have done over the last couple of quarters as well, and the management or the conference call highlights also-- they said there is a lot of unforeseen situations which impacted margins as well, there was weak demand in certain key products, so maybe the last couple of quarters have not been the best, do you think things are on the mend out there?
Bhavin Shah: Hopefully, there will be a call to discuss the near term outlook or the recent quarter results from the company, and I think that maybe the best forum to understand the direction. But from what I understand, the last quarter was probably sort of a bottom for the company in terms of near term direction.
Obviously, there was a big drop in the prices of the products they sell along with the crude oil price correction, so that obviously has affected the overall numbers. But they have also completed expansion facility and also an upgrade which perhaps will also help going forward.
ET Now: After the Fairfax open offer, how will life change for the company?
Bhavin Shah: As such there is no immediate management change. Mr. Nahoosh Jariwala who has been running the company continues to run the company. There is no immediate change in the board as well. The company gets a very strong financial partner, which can be very important for future expansion plans that the company may have.
ET Now: Tell us a little bit more about what does Adi Fine Chemical actually do? We understand it is a speciality chemicals business, but if you could give us some more details on what the business details are like?
Bhavin Shah: Right. The company processes basically vegetable oil fats and produces some intermediate chemicals that are used in a very wide range of industries, and in many cases there are very few competitors that the company has.
One of the industries that the company supplies is to also paint, for example, and there are opportunities for the company to also do some forward integration into more higher value added products.
ET Now: Do you have an existing relationship with the Fairfax group directly or indirectly, when I say you and the company?
Bhavin Shah: As far as Adi Finechem, I think this is a new relationship as far as I understand.
ET Now: I completely understand. I was looking at the quote given by Prem Watsa as well wherein he is saying that he is looking forward to the growth continuing under the leadership of Nahoosh Jariwala as well, but if they are taking 45% and assuming that at some point of time if a part of this open offer is also successful which means that they will probably have holding over 50%, there would be some change to the board or the management as well, right?
Bhavin Shah: That is a question that Fairfax can address the best.
ET Now: Any sense about the growth trajectory in Adi Finechem as well because I was just looking at what they have done over the last couple of quarters as well, and the management or the conference call highlights also-- they said there is a lot of unforeseen situations which impacted margins as well, there was weak demand in certain key products, so maybe the last couple of quarters have not been the best, do you think things are on the mend out there?
Bhavin Shah: Hopefully, there will be a call to discuss the near term outlook or the recent quarter results from the company, and I think that maybe the best forum to understand the direction. But from what I understand, the last quarter was probably sort of a bottom for the company in terms of near term direction.
Obviously, there was a big drop in the prices of the products they sell along with the crude oil price correction, so that obviously has affected the overall numbers. But they have also completed expansion facility and also an upgrade which perhaps will also help going forward.
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