The holding of promoters led by Pawan Kumar Ruia in Dunlop India will be reduced to 38.53% if the proposal to issue five crore fresh shares to offset a Rs60 crore inter-corporate loan goes through, reports PTI.
Post-allotment, the Ruia group’s control (the existing promoters) will be slashed from 65.29% to 38.53%, Mr Ruia, the group chairman told PTI.
The loan was taken for working capital requirements and the allotment to these entities would help in better restructuring of the company.
Dunlop India would convene an extraordinary general meeting on 28 April 2012 to seek the shareholders’ approval on the proposal to convert the Rs60 crore loan into shares.
According to the proposed arrangement, Dunlop India would make preferential allotment of five crore shares of Rs10 each at Rs12 a share including a Rs2 premium to Suncap Commodities (1.75 crore shares), Regus Impex (1.75 crore shares) and Salputri Commerce Private (1.5 crore shares).
The company said conversion of loan into equity shares was requested by these three firms in March to convert their outstanding loans totalling Rs60 crore.
Dunlop had availed an inter-corporate loan from a group company, Stephens Financial Services Private Ltd in September, 2011. This loan was transferred to the three companies in January, 2012 through a deed of assignment.
Post issue, the paid up capital would increase from Rs71.98 crore to Rs121.98 crore.
Source: Money Life