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Family Business Roundup: Hero Motocorp, Bollore, Orascom, and Heineken

Munjal patriarch sells €263 stake in Hero MotoCorp; Share prices at Bollore jump for second day; Orascom to list fertiliser and chemical division; and Heineken board looks to appoint family member

Munjal patriarch sells €263 stake in Hero MotoCorp

Brijmohan Lall Munjal, the chairman of Indian motorcycle manufacturer Hero Motocorp and Munjal family patriarch, has sold €263 million worth of shares in order to raise capital for new investments.

The 91-year-old sold nearly seven million shares in the company he co-founded, reducing his ownership stake to just over 36% from 39.9%. Analysts believe the chairman is looking to raise cash for investment in the power and real estate sectors.

“At this moment we can’t announce until we finalise it,” Munjal said in a statement. “We are looking at different opportunities. India offers a number of unique opportunities at the moment.”

Following the sale, shares prices at Hero MotoCorp fell as much as 5.7%.

Hero Motocorp recently ended a 26-year-old partnership with Japanese car maker Honda that began when India began opening doors to international investment. 

A predecessor company to Hero MotoCorp was established by four Munjal brothers in the 1950s and proved popular because of the motorcycle’s low cost and fuel economy.

Share prices at Bollore jump for second day

French family-controlled holding company Bollore has seen share prices increase for the second day after one of the world’s most infamous short-sellers praised the company on Bloomberg TV.

Muddy Waters Research founder Carson Block, who gained national attention last year after exposing accounting problems at a slew of Chinese companies, said the opaque structure of the company gave stock the potential to double in size.  

The 35-year-old said: "Because of this corporate structure, there's so much circular ownership that, effectively, you have all of this treasury stock that's not being excluded under accounting rules.

“So true shares outstanding we estimate are really about 1.1 billion, meaning the public, instead of owning about 25% of this company, actually owns about 52% of it.”

Share prices to jump to their highest level since September following Block’s segment on Bloomberg TV’s “Market Makers”, with prices increasing from $4.30 to $4.56.

Orascom to list fertiliser and chemical division

Orascom Construction, the global engineering and construction business headed by Egyptian billionaire Naguib Sawiris, is set to demerge its fertiliser and chemical business and list the two in Dubai and Egypt.

The demerger will take place on 7 March, according to a company statement. OCI NV will remain on the Amsterdam stock exchange, while Orascom Construction and its engineering operations will be listed in Dubai and Egypt.

Orascom believe the demerger will attract fresh investment for both companies and allow them to pursue new partnerships and joint ventures. Orascom Construction will also offer up to 15.8 million new shares.

OCI was established by Sawiris’ father Onsi in the 1950s and quickly became a leading fertiliser producer and construction contractor with projects across Europe, the Middle East, and North America.

OCI posted a €216 million profit in 2013 on revenues of €4.5 billion, compared with a loss of €1.39bn the previous year.

Heineken board looks to appoint family member

Dutch brewer Heineken has announced that Michel de Carvalho, husband of its largest shareholder, Charlene de Carvalho-Heineken, will be considered for a role on the executive board of directors at a shareholders’ meeting in April.

His wife, the only daughter of former Heineken CEO and chairman Freddy Heineken, is a fourth-generation executive director.

If successful, de Carvalho's appointment will see him join the board with effect from 23 April, for a maximum period of four years.

De Carvalho is currently a member of the supervisory board of Heineken and director of L'Arche Green, the company in which the Heineken and Hoyer families have combined their shareholdings in Heineken.

He is also chairman of Citi Private Bank for Europe, Middle East and Africa. 

Heineken was founded in 1864 in Amsterdam by Gerard Adriaan Heineken. Today it has operations in more than 70 countries and sells around 170 different brands of beer.

The company had 2013 annual revenues of €19.2 billion.


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