SREI Infra gets 24% of Deccan Chronicle expanded equity holding
The lender emerges as the largest share holder in the company
 "SREI Infra gets 24% of Deccan Chronicle expanded equity holding")
With this, SREI has emerged the single-largest share holder in the beleaguered media company.
The allotment of 66,037,735 (66 million) shares to SREI at Rs 3.18 apiece constitutes 24 per cent of the expanded paid-up equity share capital, comprising 275 million shares. The value of the shares allotted to the lender comes to about Rs 21 crore.
The allotment was made in line with the orders by the Debt Recovery Tribunal (DRT)-1, Kolkata, on December 24, 2014, and the decision taken by the board in September last year, the filing noted. “The said shares have been issued pursuant to the conversion option exercised by SREI Infrastructure Finance Limited as per Section 81(3) of the Companies Act, 1956, and as directed by the said orders of the DRT. The said shares have been issued in the physical form as requested by the lender,” it said.
DCHL’s promoters have already been facing multiple legal cases and a CBI inquiry over the default on payment of loans and related irregularities. In January 2014, they had admitted they had received a notice from SREI Infra for conversion of a part of the latter's loan dues into equity.
The move came after Kolkata-based SREI Group had initiated legal steps to recover Rs 220-crore which it had lent to DCHL.
It asked the media firm to "convert such a value of the part outstanding amount into such number of fully paid-up, voting equity shares of DCHL so that at any time, the said converted shares shall be at least 24 per cent of the total expanded paid-up equity share capital of the company”.
The allotment of 66,037,735 shares to SREI constitutes 24 per cent of the expanded paid-up equity share capital comprising of 275 million shares as compared to 20.89 million shares prior to the issuance of fresh equity shares. The value of the shares allotted to the lender comes to about Rs 21 crore.
"With this development the scope for the non-promoters to exercise control over the management of the company will increase if they seek to act together," Satish Kantheti of Zen Securities said in response to a question on the possible consequences of the allotment of shares to SREI. The Kolkata-based company earlier maintained that it was just another option for part recovery of the loan.
According to the share holding pattern declared in November, 2014, the promoters and the promoters group category hold just about 15.39 per cent of the total equity shares in the company followed by Religare Finvest with 14.45 per cent shares.
Total shares in the non-promoters having 1 per cent and above holding stood at 35.84 per cent with ICICI Bank and LIC being the other two significant shareholders. However their respective equity holding, including that of the promoters, will come down following the issuance of equity shares to SREI.
After the lenders started approaching various legal fora for the recovery of loans from DCHL in 2012 that the company management had admitted that it was sitting on a pile of over Rs 4000 crore debt much of it still remained unsettled.