Emami Ltd promoters — Goenka and Agarwal families — recently sold another 10 per cent of their stake in the group flagship, raising ₹1,230 crore. The proceeds will be used to reduce debt at the promoter-level. Post stake sale, the promoter-holding in Emami Ltd stands at 52.74 per cent. The company recently clarified that Emami Ltd, Emami Group or any of its company /promoter and promoter group has not issued any NCD (non-convertible debenture) or it has any exposure to SBI MF. In an interview to BusinessLine , Mohan Goenka, Director, Emami Group, talks about the promoter debt level concerns, among other things. Excerpts:

Is promoter holding in Emami Ltd expected to be at 52.74 per cent or will it change?

There is no way promoter holding will reduce from here. At present, our first priority, and focus, will be on reduction of debt. After that, we will think of other options.

The Group had said the same when the promoters sold 10 per cent in February.

Our priority (this time) was to pay off the mutual funds and our lenders. So, we acted according to the situation. Now, pledged share to debt mutual fund is zero; with promoter-level-debt being at ₹2,200 crore, mostly through banks

How do you plan to bring down the debt?

We have matured assets at the group-level and we may look to bring in strategic partners. The options could include a part sale in the other group companies or sale of some of the assets we have.

For instance, a land deal may happen and we may not need to bring down stake in other group firms. So, what I’m saying is as and when we monetise, we take a call on the next step.

Are you open to bringing in PE funds in other group companies?

We are open to all options, be it a PE or a strategic partnership.

What is a comfortable debt level for you?

Ideally, we would want promoter debt at the group level to be at zero over the next 6-8 months.

With this reduction in controlling stake, will there be an impact on operations of Emami Ltd? Will big ticket acquisitions be put on hold?

Emami Ltd operates independently from promoters. The company has a ₹600-crore profit and advertising and all other things go on as planned. There is no cut as such.

The board will evaluate options and opportunities when it comes to acquisitions. Having said that, the priority for the promoters will be to reduce debt.

What is the outlook for the FMCG business?

Markets continue to be a bit dull. Rural offtake is slow, but with the monsoon picking up, we hope things will look up.

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