Gammon seeks shareholder nod to acquire up to 20% in GIPL

Gammon India has sought shareholders' nod to acquire up to 20 per cent stake in group firm Gammon Infrastructure Projects (GIPL) as part of rejigging the shareholding pattern in the subsidiary.
These shares are to be purchased from Gammon Power Ltd (GPL), a wholly-owned subsidiary of Gammon India.
Besides, there is plan to sell Gammon Power's entire stake in Gammon Infrastructure Projects Ltd.
The nod has been sought on special resolution to "invest and acquire by way of purchase or otherwise in and up to 20 per cent of the equity shares of GIPL from its wholly-owned subsidiary GPL at the prevailing market price on the date of purchase, in one or more tranches, notwithstanding that the aggregate of the investments so far made or to be made exceeds the limits or will exceed the limits laid down under the Act," the company said in a BSE filing.

The other resolution pertained to authorising sale of up to 30 per cent of equity shares of GIPL held by the company's wholly owned subsidiary GPL, the company said.
Gammon India holds 58.44 per cent of the shares in GIPL through two of its wholly-owned subsidiaries.

One of them, GPL, holds 52.80 crore of GIPL, aggregating 56.06 per cent of the share capital.
GIPL is listed on the National Stock Exchange and BSE.
The company said 23.27 crore shares (24.72 per cent) of GIPL are presently pledged with IDBI Bank and 26.40 crore (28.03 per cent) with ICICI Bank as security for financial assistance provided by the banks.

The company through a special resolution passed by postal ballot on May 20, 2016, had approved sale of up to 30 per cent of the shares of GIPL held by GPL in one or more tranches at such times and in such a manner as may be approved by the board in order to repay the loans of ICICI Bank and IDBI Bank.
"The board of directors in its meeting held on February 20, 2017, has, subject to members, joint lenders and all other statutory approvals, permitted GPL to further sell the balance 26.06 per cent of the shares of GIPL... Either on the floor of the exchange or as an off-market transaction at the market price prevailing on the date of sale in one or more tranches," it said.

The company said that as a strategic and prudent business decision, the board is of the opinion that since the loan facility of ICICI Bank and IDBI Bank is a liability for the company, it is necessary that both the loan liability and the corresponding security are consolidated in a single entity.