Mumbai, Feb 18 (IANS) Emami Group's promoters on Monday sold their 10 per cent stake in its flagship Emami Limited, raising about Rs 1,600 crore in order to reduce their debts.
"The stake sale proceeds will reduce promoter debt which was used in creation of assets like cement and solar power," the company said.
After the stake sale, the promoter holding in the FMCG major will stand at 62.74 per cent.
The transaction was executed on the stock exchange on Monday and the purchasers included SBI Mutual Fund, PremjiInvest, Amundi, IDFC, L&T Mutual Fund and Pioneer Investment.
The list of sellers was topped by Diwakar Viniyog, promoter with highest holding followed by Sun Track Commerce, Bhanu Vyapaar, Amitabh Goenka, Raviraj Viniyog and Suraj Viniyog and Prabhat Viniyog each.
Commenting on the divestment, Mohan Goenka, Director, Emami Limited said, "We have concluded a stake sale which will ease the liquidity position of the promoter group and reduce the debt."
He also said the promoters are committed to maintaining their significant majority stake in the company and "do not anticipate any further dilution of stake in the foreseeable future".
Significantly, about 47.58 per cent of the company's shares are pledged by the promoters.
Emami Group is seen having large LAS (loan against securities secured against collateral) borrowings from non-MF lenders too. Emami promoters held 72 per cent stake, of which half is already disclosed as pledged.
The problem is average daily traded volumes of Emami shares are barely Rs 10-12 crore. Emami stock price is already nearly 50 per cent down from its peak and could be the next big bust.
In 2015, Emami raised Rs 950 crore to partially fund the Kesh King acquisition for Rs 1,684 crore. It bought Kesh King and allied brands from SBS Biotech, a deal which analysts categorised as expensive at the time.
(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)
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