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Sical Logistics seeks shareholders' nod to sell or hive off business units

The price of the assets and businesses would be based on valuation and the company might look either at strategic sale or slump sale, whichever worked better for it and its shareholders

Gireesh Babu  |  Chennai 

Sical Logistics seeks shareholders' nod to sell or hive off business units

Sical Logistics, part of Coffee Day Group, has sought shareholder's approval to sell, dispose of or hive off business undertakings, including through sale of shares and assets. The company had earlier announced its plans to reduce its assets to lower debt amid a liquidity crunch since the demise of promoter V G Siddhartha.

The resolution sought shareholders’ approval for divestment, sale or disposal of business units, or assets and shareholding in subsidiaries, to one or more persons in tranches, subject to the release of shares pledged with lenders.

"In order to find suitable buyers, the subject of sell, dispose of or hive off the business undertakings are required to be approved by shareholders. The company is currently looking to sell its various business units as well the shareholdings held in subsidiaries, either as such or consolidating by purchase of shares held by other investors in subsidiaries," said the company in a postal ballot filed with exchanges on Tuesday.

The price of the assets and businesses would be based on valuation and the company might look either at strategic sale or slump sale, whichever worked better for it and its shareholders. The proceeds would be utilised to lower debt, and it was in the process of identifying suitable buyers, it added.

In order to repay some debt and to run the company’s major businesses smoothly, the board of directors had In August directed the management to explore opportunities to deleverage the company and its subsidiaries.

Sical has also sought shareholders’s approval to increase the limit at which it can invest in or extend loan or guarantees to its subsidiaries in connection with loans.

While announcing its financial results for the quarter ended September 2019, Sical had said: "The liquidity challenges arose on account of the demise of our promoter V G Siddhartha. Subsequently, multiple meetings with lenders to seek a moratorium on debt servicing obligations did not yield positive results. Bankers continued to withhold collections from operations towards debt servicing obligations, including some falling due in the future."

Further, new projects won by the company in previous years and supposed to begin operations this year were on hold due to liquidity challenges, it added.

First Published: Tue, November 26 2019. 19:11 IST
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