Mercator gains as overseas subsidiary gets funding

Mercator rose 2.89% to Rs 37.35 at 12:31 IST on BSE after the company said that its step down overseas subsidiary engaged in carrying on the business of oil & gas and allied services has entered into an agreement to avail a facility of $55 million.

The announcement was made after market hours on Wednesday, 4 June 2014.

Meanwhile, the S&P BSE Sensex was down 17.64 points or 0.07% at 27,788.19.

On BSE, so far 4.05 lakh shares were traded in the counter as against average daily volume of 5.40 lakh shares in the past one quarter.

The stock hit a high of Rs 37.80 and a low of Rs 36.55 so far during the day. The stock hit a 52-week high of Rs 40 on 23 May 2014. The stock hit a 52-week low of Rs 9.10 on 6 August 2013.

The stock had outperformed the market over the past one month till 4 June 2014, surging 13.08% compared with the Sensex's 10.72% rise. The scrip had also outperformed the market in past one quarter, galloping 89.56% as against Sensex's 16.95% rise.

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

Mercator said that Mercator Energy Pte (MEPL), a step-down overseas subsidiary of the company, engaged in carrying on the business of oil & gas and allied services of the company, has entered into an agreement on 4 June 2014, to avail a facility of $55 million. The said facility will be compulsorily converted into equity shares of MEPL in the event of listing of its shares at a pre-determined discount to the listing price, Mercator said. In the event of non-listing of its shares, the facility will be repaid at a pre-determined yield to maturity at the end of 6 years from the first drawdown. This transaction will help MEPL to expand in the oil and gas space, Mercator said.

Mercator reported a consolidated net profit of Rs 2.10 crore in Q4 March 2014 as against net loss of Rs 165.20 crore in Q4 March 2013. Net sales declined 10.4% to Rs 901.50 crore in Q4 March 2014 over Q4 March 2013.

Mercator group has diversified business interests in coal, oil & gas, commodity transportation and dredging.

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