Aventis CropScience was bound to garner investor apathy after posting disappointing results.

In fact, the scrip of the crop protection products company dropped a solid 3.99% to Rs 139.65 on BSE by 10:35 IST. Only 175 shares of the company were traded till then.

The current disappointment stems from the company's latest results. For the quarter ended 31 December 2002, the company posted a loss of Rs 1.11 crore as against a net profit of Rs 4.13 crore in the corresponding period of the previous year. Total income decreased by 48.5% to Rs 61.38 crore from Rs 119.07 crore (Rs 1.19 billion).

For the year ended 31 December 2002, the company's net profit declined by 53.3% to Rs 14.52 crore (Rs 31.11 crore) on a 27.4% fall in total income to Rs 316.45 crore (Rs 3.16 billion).

The poor monsson this year engendering severe drought conditions in the north, west and south during the kharif and rabi seasons resulted in a large reduction in the planted areas of key crops like cotton and rice. For example, the cotton planted area in the north, where the company has a significant presence, decreased by 30%.

The company's board, in any case, has recommended a 20% divided for FY 2002. The board of directors of Aventis CropScience India, also approved the divestment of products containing Fipronil and Phosalone as active ingredients.

Earlier, the government approved Bayer CropScience's Rs 74-crore proposal for hiking equity stake in Aventis Crop Science India to 100%. BC had made an open offer to the equity shareholders of ACIL to buy out the remaining 32.92% stake in the company at a price of Rs 157 per share. The offer opened on 1 November and closed on 30 November 2002. BC intended to acquire 45,98,312 fully paid-up equity shares of Rs 10 each, representing 32.92% of the outstanding paid-up equity share capital of ACIL, so that it could de-list the shares of the Indian arm from the local bourses.

Currently, promoters hold 73.68%, while the public and institutions hold 12.90% and 4.86% in the company's equity, respectively.

In June last year, after the open offer from BC, the Securities and Exchange Board of India received complaints from some shareholders of ACIL claiming inter alia that the offer price was not calculated correctly and it should have been higher than the Rs 157 per share stipulated. They also said that the negotiated price for ACIL should be calculated on the basis of sales multiple for the global transaction.

Sebi called for various clarifications from Ambit Finance, the manager to the issue, and also advised it not to proceed further with the offer till the issuance of final comments by it on the draft letter of the open offer filed with the market regulator on 20 June 2002. Thereafter, Sebi examined the complaints received from the ACIL shareholders and the submissions made by Ambit. On 18 October 2002, the market regulator approved inter alia the originally announced offer price of Rs 157 per share.

Earlier, on 3 June 2002, BC, a 100% subsidiary of Bayer AG, acquired 100% of the share capital of Aventis CropScience Holding SA pursuant to an agreement entered into by Bayer AG with Aventis and Schering on 2 October 2001. Aventis Cropscience Holding SA was the global holding company for the crop science business of Aventis. As per terms of the agreement, the acquisition was subject to certain closing conditions, including anti-trust clearance by the EU Commission and US Federal Trade Commission.

These conditions having fully been met on 3 June 2002, the global acquisition deal closed on that day. Bayer CropScience Holding SA indirectly holds stake in ACIL through its wholly owned subsidiaries - Bayer CropScience SA and Aventis CropScience GmbH and BCS.