GTL board okays MoU to develop Mumbai property

Cigarette maker Golden Tobacco (GTL) today said the company board has approved an agreement with a builder to jointly develop its Vile Parle property in Mumbai.

GTL said in a filing to the Bombay Stock Exchange (BSE) that the board has approved the Memorandum of Understanding (MoU) with "a reputed builder" for jointly developing its property situated at SV Road, Vile Parle, Mumbai.

The Vile Parle property is estimated to be valued at over Rs 800 crore. The filing however did not identify the builder, nor did it elaborate on the plans.

Golden Tobacco sells cigarettes under brands like Panama, Chancellor, Golden's and Steel.

The board has also approved the shifting of its existing manufacturing activities, it said, without providing details.

The board approval for developing the Vile Parle property comes against the backdrop of protests by a minority shareholder of GTL, Pramod Jain, who has alleged that the company was indulging in asset-stripping.

Jain, who holds 6.47 per cent in GTL, decided to make an open offer in November to hike his stake to 25 per cent, saying that he wants to prevent the promoters from stripping assets. The offer is yet to get the Securities and Exchange Board of India go-ahead.

He had also threatened to seek injunction against the GTL board meet.