Indian lenders sold the entire 12 per cent stake held by Vijay Mallya in Mangalore Chemicals and Fertilisers as part of their efforts to recover their dues from the head of UB Group. The shares were sold in the stock markets and the proceeds will be used to retire part of bank dues.
The current promoter of MCF, the Adventz Group, is steadily increasing its stake in the company. MCF stocks closed 10% up at Rs 68 apiece on Thursday.
The complete exit of Mallya from MCF brings an end to a decades long relationship between the UB Group and MCF. The company came into UB Group in the 90s and after a stint in the BIFR, the UB Group revived the company by late nineties. For the December quarter, the company reported revenue of Rs 327 crore and a net profit of Rs 80 lakh.
Lenders said while the proceeds of MCF stake sale is negligible as compared to the high dues of Rs 9,200 crore notched up by Mallya, they are looking at all UB Group assets to recover their dues.
The new owner of MCF is also facing financial issues. The Adventz Group, led by Saroj Kumar Poddar, took over Mangalore Chemicals and Fertilisers Ltd in 2012 after winning a takeover battle with rival Deepak Fertilisers.
A year later, another group company, Texmaco Rail and Engineering Ltd acquired its rival Kalindee Rail Nirmaan (Engineers) Ltd. Poddar’s flagship Zuari Agro Chemicals Ltd was the toast of the town with every banker making a beeline to Poddar’s office with M&A offers.
But the party soon ended with the group delaying its loan payments since last financial year and bankers worrying over the future of the group considering that its flagship company announced closure of its NPK-A plant in July citing non-availability of its workers due to Covid-19. Mangalore Chemicals had also announced to the stock exchanges that its outstandings to banks are Rs 224 crore.
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU