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July 18, 2001
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Money > Business Headlines > Report July 18, 2001 |
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Chatterjee too sells out 12% stake to ModiTamal Bandyopadhyay & Bhupesh Bhandari In possibly the first of its kind deal, the financial institutions have joined hands with "private parties" to strike a block deal for selling off their stake in Modi Rubber Ltd. After hard bargainings over the last weekend, the institutions struck a deal with B K Modi for not only selling their collective stake of 44 per cent but also an additional 12 per cent held by Purnendu Chatterjee of the Chatterjee Group. B K Modi on Tuesday claimed that Chatterjee has also sold his 12 per cent share to the Modis. "The financial institutions have also agreed to sell their shares soon," Modi told Business Standard. In effect, brothers BK Modi and VK Modi will buy out 56 per cent stake of the financial institutions as well as the private parties. What is more, they will have to cough up the money upfront even though the entire block of shares will not change hands right now. Since the MRL open offer was made for 35 per cent, the FIs and the Chatterjee associates will sell their stake proportionately now while the rest will be sold at a later stage. The modalities of the sell off are being worked out. "The FIs are not insisting on bank guarantees. They want cash upfront which will be kept with a trustee while the shares will change hands in tranches over the next few months or even a year following the existing regulations," an institutional source pointed out. The Bombay High Court has extended the open offer by a week and the institutions are expected to appoint the trustee for the open offer money next week. Once acquired, the Modis are free to sell off the stake to a suitor of their choice and a price that suits them. The FIs are not putting any riders on these issues. The Modi family holds 24.5 per cent stake in Modi Rubber. Meanwhile, the special board meeting of the company scheduled to be held on Tuesday in New Delhi was deferred. The new date for the meeting has not yet been announced. According to sources, the deferment is a clear indication that the institutions have decided to exit from Modi Rubber. Powered by YOU MAY ALSO WANT TO READ:
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