McNally tightens grip on LSE-listed Specialist Energy

McNally Bharat Engineering Co Ltd has increased its holding in London Stock Exchange-listed Specialist Energy Group Plc to over 22%, a move being seen as the precursor to its ultimate takeover by the Deepak Khaitan-controlled company.

MBE Mineral Technologies Pte Ltd, McNally Bharat’s fully owned subsidiary, has disclosed to the London Stock Exchange a week back that its holding in Specialist Energy, a maker of electric motors and pumps, has touched 22.74%.

MBE Mineral, the Singpore-based special purpose vehicle earlier used by McNally to acquire the coal and mineral Technology business of KHD Humboldt Wedag International Ltd, has been mopping up shares of Specialist Energy for some time. It started with a little over 10% stake in September, which increased to 13.88% in February and to 22.74% this month.

The Khaitans can still continue to raise their stake before the mandatory open offer rule is triggered.

As per the UK’s code on takeovers and mergers, MBE Mineral is required to make a mandatory open offer if its holding touches 30% of the voting rights.

Deepak Khaitan, who is travelling abroad, couldn’t be reached for comments.

MBE Mineral Technologies has become the single largest shareholder in Specialist Energy, which has just reported a 23% growth in net profits for 2010 at £2 million, and £38.5 million of revenue, which has grown 5%.

During the year, Specialist Energy’s net debt level has halved to £6.7 million from £13.7 million in 2009.

The development also comes at a time when the Isle of Man-registered company, whose revenues come mainly from supplying fluid filled electric motors and pumps for the power generation and oil and gas markets, is now eyeing India and China as its two key markets.