LIC sells 2% stake held in M&M

Life Insurance Corporation of India (LIC) sold 2.006% stake in Mahindra & Mahindra (M&M) through market sale between 10 May 2019 and 21 December 2020.

Post transaction, LIC's stake in M&M reduced to 8.430% from 10.436% earlier.

Meanwhile, JP Morgan has issued a notice to M&M's SsangYong Motor Company (SYMC), a material subsidiary, demanding the repayment of outstanding loan amount of 40 billion KRW (Korean Won) (approximately Rs 268 crore) along with interest. SYMC has intimated to the Korean Stock Exchange that it could not repay the loan amount of 40 billion KRW to JP Morgan on account of SYMC's application for rehabilitation.

Last week, SYMC informed that it had outstanding loans aggregating of 100 billion Korean Won (KRW) (approximately Rs 680 crore). Among the outstanding loans, about 60 billion KRW (approx. Rs 408 crore) is owed to JP Morgan Chase Bank, N.A., Seoul Branch, 10 billion KRW (approximately Rs 68 crore) from BNP Paribas, Seoul Branch and about 30 billion KRW (approx. Rs 204 crore) from Bank of America N.S., Seoul Branch.

While the company had made a commitment to cover the above-mentioned loans given by the banks, its final liability will be limited to the extent not recovered from SYMC. Out of the total outstanding amount with these banks, SYMC has missed repayments of the following loans aggregating an amount of approx. 60 billion KRW (approx. Rs 408 crore) which were due and payable on 14 December 2020.

Shares of M&M were up 2.25% at Rs 710.70.

M&M reported 59.7% decline in net profit to Rs 148.36 crore in Q2 FY21 from Rs 368.43 crore in Q2 FY20. Net sales fell 1.5% year-on-year (Y-o-Y) to Rs 23,566.75 crore during the quarter.

M&M's business is diversified across farm equipment, auto and automotive components, real estate, hospitality, information technology, defence and aerospace and financial services.

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