With corporate predators breathing down their neck, promoters of a slew of companies are busy issuing preferential shares or converting warrants ahead of tenure to ring-fence their firms from any hostile takeovers.
The companies that have begun doing so include Sujana Towers and KS Oil in which firms controlled by NRI business man C Sivasankaran has been steadily building up positions over the past few quarters. Also doing so is Sical Logistics, which has been in the bull?s-eye after former BPL Mobile honcho-mentored Jupiter Capital picked up a stake in it.
?This would give promoters a much needed breather in case of a sudden hostile bid. But in some cases, it may not work as they (the promoters) have pledged lion chunk of their share with (financial) institutions and banks. A crash in the stock prices would spell trouble for the promoters of such companies?, an analyst with a local fund house told FE.
Latest, KS Oil, in a regulatory filing on December 30, said the board of directors of the company has decided to allot 1,64,61,337 equity shares of Rs. 1 each to promoters on conversion of warrants issued to them way back in July last at a price of Rs 54.50 per equity shares.
The move would see promoters’ holding in the company inching up to a tad lower than 39% from the over 36% stake they were holding as of the end of September quarter.
The stake of Siva Group entities, on the other hand, would stand reduced to less than 12% compared with the 12.44% they were holding as of December 27, 2010.
Sujana Towers, another stock in which the Siva Group companies have taken a fancy of late, last month has decided to convert 80 lakh warrants issued by the company to the promoters to 80 lakh equity shares of Rs 5 each at a premium of Rs 50 per share. This helped the promoters to scale up their stake to a comfortable 44% against the 39% holdings they had as on the end of September quarter.
The AC Muthiah-promoted Sical Logistics, however, had decided to bring in a white knight in their defence after Jupiter Capital, a Bangalore-based investment company promoted by former BPL Mobile honcho Rajeev Chandrasekhar, bought out the entire 13.28% stake held by IDFC Private Equity Fund II (IDFC PE) in the company.
The promoters had not only divested 10% stake in the company in favour of Tanglin Retail Reality Developments, a step-down subsidiary of the Coffee Day Holdings, but also allotted 1.60 crore equity shares on a preferential basis to the Coffee Day arm. Post-preferential issue, the stake of Tanglin Retail would go up to 36.03%.
