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McLeod Russel offloads stake to reduce debt burden of Rs 791 cr

Firm sold around 9% stake, bags over Rs 200 crore in a day's trade

Avishek Rakshit  |  Kolkata 

McLeod Russel
Logo of McLeod Russel. (Photo: Company website)

Taking advantage of the ongoing rally in of companies, McLeod Russel, the world's largest producer, offloaded 9.14 per cent of its stakes in the open market.

It raised over Rs 200 crore in a day's trade and the money is to be used for reducing its current debt burden of Rs 791 crore.

The company's promoters, comprising the Khaitan family and its associated investment and financial arms, held 49.89 per cent stake in the company as on end-September. Of the promoter shareholding, Borelli Holdings (BTHL), one of the subsidiary companies, accounted for 24.73 per cent. Kamal Kishore Baheti, director, held those in his capacity as trustee of BTHL.

On Thursday, as stocks rallied past eight per cent in intra-day trade, the company decided to offload 10 million of BTHL of its 27 mn Stake was said to have been sold to both institutional investors and the public.

Baheti said McLeod Russel had been thinking of taking such a move to reduce the debt burden. "We had decided to offload stakes previously but the investors also had to be interested. Now, with confidence again returning to stocks, we felt it is a good time to do it," he said.

On investor expectations of rising prices, which would pull up the revenue of producers, stocks of McLeodRussel, Goodricke Group, Warren Tea, and others in the segment have been surging. In Thursday's trade, scrips of McLeod rose 7.1 per cent to close at Rs 234.60; Goodricke saw a 6.2 per cent jump to Rs 510.50 at the end of trade. rose 2.8 per cent to close at Rs 132.1.

In August this year, McLeod sold off loss making Bhatpara Estate to reduce its debt burden. The sale fetched it Rs 13.2 crore..

First Published: Thu, November 30 2017. 17:48 IST
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