Mercator gains after completing all formalities for divestment of step-down subsidiary

Mercator rose 3.04% to Rs 28.80 at 11:30 IST on BSE after the company said that all the formalities for sale of entire shares in its Singapore based step down subsidiary have been concluded on 27 April 2016.

The announcement was made during market hours today, 28 April 2016.

Meanwhile, the S&P BSE Sensex was down 112.67 points or 0.43% at 25,951.45.

On BSE, so far 2.4 lakh shares were traded in the counter as against average daily volume of 2.11 lakh shares in the past one quarter. The stock hit a high of Rs 29.25 and a low of Rs 27.70 so far during the day. The stock had hit a 52-week high of Rs 31.45 on 24 December 2015. The stock had hit a 52-week low of Rs 14.55 on 3 June 2015. The stock had outperformed the market over the past one month till 27 April 2016, jumping 34.38% compared with Sensex's 2.87% gains. The scrip had also outperformed the market in past one quarter, rising 27.63% as against Sensex's 6.42% gains.

The small-cap company has equity capital of Rs 24.49 crore. Face value per share is Rs 1.

On 30 March 2016, Mercator had said that its wholly owned subsidiary, Mercator International Pte. (MIPL) received approval from the Singapore exchange for divestment of MIPL's entire stake in the company's step-down subsidiary Mercator Lines (Singapore) (MLS). On 10 February 2016, MIPL had entered into a sale and purchase agreement for sale of its entire stake of 90 crore shares MLS to three buyers for 900 million Singapore dollars.

On 18 January 2016, Mercator's board of directors had approved as a part of an ongoing portfolio restructuring exercise to exit dry bulk business carried on by its Singapore Stock Exchange listed arm MLS by way of divestment. MLS had carried a debt of Rs 1000 crore and reported loss after tax of Rs 768 crore in FY 2015. Its operations was consolidated in the financial accounts of Mercator India and adversely affecting its consolidated performance. The bulk carriers business has been the worst affected by the downturn in the shipping cycle and not showing signs of early revival in future, the company had said at that time.

On consolidated basis, Mercator reported net loss of Rs 319.93 crore in Q3 December 2015 compared with net profit of Rs 6.17 crore in Q3 December 2014. Net sales rose 0.9% to Rs 714.64 crore in Q3 December 2015 over Q3 December 2014.

Mercator group has business interests in coal, oil & gas, shipping and dredging.

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