share purchase agreement
KOTIC · price
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Kothari Industrial Corporation Ltd has entered into a share purchase agreement to acquire 30% stake (7.80 crore equity shares) in Phoenix Kothari Footwear Limited from Mr. Rafiq J Ahmed, who is the company's own Promoter, Chairman and Managing Director. The total cash consideration is Rs. 99.06 crores at Rs. 12.71 per share, of which Rs. 40 crores has already been paid as advance and the balance will be paid as per the agreement. Since the seller is the promoter, this is classified as a Related Party Transaction and has been approved by the Audit Committee, Board, and shareholders, and is being carried out at arm's length. Phoenix Kothari Footwear Limited is a public company incorporated in December 2022 engaged in footwear manufacturing in Chennai with nil turnover in FY 22-23 and FY 23-24. The acquisition is described as a strategic move to strengthen the company's presence in the footwear segment.
This is a sizable Rs. 99 crore related-party deal where the listed company is buying into a footwear venture personally held by its own promoter. While the audit committee and shareholders have cleared it as an arm's length transaction, investors should note the target currently has zero revenue, so the strategic payoff depends on how quickly footwear operations scale up from here.