Promoter holding may have fallen: Gati

Press Trust of India / Hyderabad November 15,

Gati Managing Director Mahendra Agarwal today indicated that some part of promoter-holding in the company may have reduced after its shares, majority of which have been pledged to lenders, witnessed a bloodbath on the bourses for the past three days.



BSE | NSE
Price



Click here to visit SME Buzz




Also Read

Related Stories
News Now



- CBI investigating alleged violation of telecom laws by SingTel
- Expected downgrade
- Mundra Port Q2 net up over 29% at Rs 273 cr
- GSK will pay $3 bn to settle US drug row
- BJP blames Sonia for corruption
- Retrogation in social development indices in Gujarat: Jairam Ramesh




Also Read

Related Stories
News Now




- Sensex ends down 270pts
- FII-TO-FII: Grasim Ind traded at 4% premium
- HDFC pips SBI to become most valued lender
- LinkedIn sets up technology centre in Bangalore
- Promoter holding may have fallen: Gati
More


Gati's promoters, led by Agarwal, have about 49.54% holding in the Rs 17.20 crore equity base of the company. However, about 90% of their holding was pledged by the promoters to meet the funding requirements for the Hydel power project in Sikkim.

"It is a fact that about 90% of our holding is pledged. When the (stock) prices have crashed so much, there will be some pressure and some selling of shares.


"We have not got any details but I am sure they (the lenders) must have done it (sold the shares). According to the agreement, whenever the prices fall they can sell," Agarwal said.


Gati's shares tumbled to an all-time low of Rs 28.85 on Monday against the weighted average of Rs 30.85, following some media reports that there is a concern among investors on whether the company would default on its FCCBs.


The scrip today closed at Rs 29.10, down 8.06% from its previous close on the BSE.


The downslide in the scrip has built margin pressures on the promoters and the pledgees too are selling off the stock in a hurry to minimise their losses.


Agarwal said the company's finances were not as bad as they were being portrayed. He said plans are afoot to demerge shipping division, which is dragging the financials down, into a separate subsidiary.


"We are also roping in a strategic partner for the express distribution business, the core activity of Gati, so that the company will be able to access global clients," he explained.


According to him, spinning off shipping division and roping in strategic partner for the express distribution business will be completed by June next year.


While Gati would hold a minority stake in the shipping business once it is hived off, it would continue to hold a majority stake in the parent company.


"Once the shipping business is hived off, we are hopeful of seeing a cash flow of Rs 20 crore every quarter and annualised cash flow would work out to Rs 100 crore," Agarwal said.


The company is also renewing the FCCBs with Goldman Sachs at a lower rate for $22 million.


"The fresh issuance of FCCBs will be for $22 million at Libor+ 500 basis points, which works out to about 5.5%. The existing FCCBs carry a rate of about 7.98%," he said.


Meanwhile, for the quarter ended September 2011, Gati reported a total income of Rs 236.32 crore and a net profit of Rs 3.83 crore.