Sanghi Group feud stalls Rs 1,500-cr growth plans

Written by BV Mahalakshmi | Hyderabad, Sep 29 | Updated: Sep 30 2008, 07:25am hrs
The ongoing feud between two factions of the Sanghi Group has prompted the Sanghi Industries management to put the companys Rs 1,500 crore expansion plans on the backburner.

Sensing a spilt in the Rs 2,500-crore group, investors have raised objections to the proposed expansion.

Sanghi Industries had lined up a strategy to augment capacity from three million tonne to eight million tonne with an investment of Rs 1,500 crore. The group was supposed to raise funds through debt or equity for the proposed expansion.

According to sources, other major investment plans of the group are also on hold due to the current turmoil in the company.

The tussle among the four brothers was regarding payment of dividend. Sudhir and Anand Sanghi wanted to repay debts to banks. However, the other two brothers Ravi and Girish Sanghi differed. But sources in the know said that the mood is not right now but is likely to ease in a day or two, when talks resume. Members of the Sanghi family have also turned mediators to resolve the issue amicably.

Incidentally, the Company Law Board (CLB) has also called for a faster settlement for the benefit of the group.

Sudhir had earlier said that he and his elder brother Anand were willing to exit from the group if they get a fair market price for their share in the familys assets. The duo agreed to offload stake in the group for Rs 1,000 crore each.

Sources also pointed out that the group is going through a valuation and is estimated to be around Rs 6,000 crore. There are 10 companies under the group with Sanghi Industries being the flagship company.