NVF Company

The company business was described as “vulcanised fibre and plastics” The figure at the end of year
1968 are given below:

(Year ending 1968)

ITEMS $ (in million) CONVERSION

(rupees in crore)

Stock Capital 17.4 121.80

(Common Stock + Preferred)
Long Term Debt 4.6 32.20
Sales 31 217.00
Net Income (Before a special $502,000 (No Million) 3.51
credit of $374,000)

The management decided to take over the Sharon Steel Corp., the fundamentals of which at same
time, ending 1968 are given below:

ITEMS $ (in million) CONVERSION

(rupees in crore)

Stock Capital 101 707

(Common Stock + Preferred)
Long-Term Debt 43 301
Sales 219 1533
Net Income $2,929,000 (No Million) 20.50

So, the company which NVF wished to acquire was thus 7 times the size NAF.
In early 1969 NVF Co. made and offer for all the shares of Sharon (owning it completely). The term
per share were $70 face amount of Junior 5% bonds, due 1994, plus warrants to buy one and half
(1.5) shares of NVF Stock at $22 per share of NVF (Described below in Table). The management of
Sharon strenuously resisted this takeover attempt, but in vain.

NVF acquired 88% of the Sharon stock under the offer, issuing therefore $102 million of its 5% bonds
and warrants for 2,197,000 (21.97 Lakhs) of its shares.

F.V. Total Value (In millions) Conversion

(Rs. In Crores)

NVF Junior 5% Bond $70 $53.67 Rs.375.69

due 1994

Stock Warrants (to buy $22 / Share $48.33 Rs.338.31

2,197,000 Shares of
NVF Stock @)
Total > $102 Rs.714 Crore

Ankur point - $102 million are together (bonds + warrants) or $102 million only for bonds?