Zuari Fertilisers acquired close to 10 per cent equity in Mangalore Chemicals and Fertilizers (MCFL) on Tuesday — 8 per cent from a State Bank of India group entity and the rest from the open market.
Amid talk of lenders of the Vijay Mallya-controlled Kingfisher Airlines selling other group firm shares pledged with them, SBICap Trustee Company sold the 8 per cent it held in MCFL for Rs 38.5 crore. Zuari purchased 1.15 crore shares of MCFL, accounting for 9.75 per cent stakefor Rs 44.3 crore.
While SBICap sold at an average price of Rs 38.5, the average purchase price for Zuari was Rs 38.4. As on December 31, 2012, Zuari did not hold any shares in MCFL. While promoters held 30.44 per cent stake in MCFL at the end of December 2012, nearly 70 per cent of their shares were pledged with various lenders.
A significant portion of the promoter shares in all UB Group companies, including Kingfisher, is pledged. Amid huge accumulated losses and soaring debt of the airline that has been grounded since October 2012, the lenders recently decided to begin the process of recovering their loans by selling the securities pledged with them.
On the BSE, shares of MCFL hit the upper circuit limit of 20 per cent at Rs 39.30 apiece on Tuesday, while Zuari Fertilisers group’s listed entity Zuari Agro Chemicals surged 8.55 per cent.