Waterbase – Can it be Next Avanti Feeds?

Waterbase Limited announces merger ratio for merger of Pinnae Foods Limited

• No cash outflow for the merger
• 4 shares of Waterbase Limited will be given for 17 shares of Pinnae Feeds Limited
• Pinnae Feeds Limited has an installed capacity of 75000 MTPA at Nellore
• Capacity of Waterbase Limited will triple from 35000 MTPA to 110000 MTPA
• Expected completion of merger by Q1FY17
• KPMG is the advisor for the transaction

The paid-up capital of Pinnae Feeds Limited is Rs. 10 crores and with this merger ratio, the equity capital of Waterbase Limited will increase by 2352941 shares or Rs. 2.35 crores… Debt as per CARE rating is Rs. 77.20 crores… These are my assumptions as per data available on internet…

Negative:
– Debt will increase, but Waterbase has almost 30 crores cash… So, shouldn’t be high I feel…

Note: Have vested interest… So, take my assumptions with a pinch of salt…