BM Khaitan Group outfit McNally Bharat Engineering Company Ltd said on Wednesday that it has placed preference shares worth Rs 40 crore to Tata Capital Financial Services Ltd.
Additionally shares worth Rs 1.6 crore were allotted to two other domestic investors — an HNI and a corporate body.
The Rs 100 face value preference shares will have a dividend coupon of 11.5 per cent, Prabir Ghosh, Wholetime Director and Group CFO, told
Earlier during the financial year, the company had taken shareholders’ permission to issue preference shares. The funds are to be utilised for long-term capital without affecting its ability to leverage, or the debt equity ratio.
“Another tranche of preference shares worth Rs 5 crore is likely to be issued to a few domestic investors by this month-end. The preference shares for the balance amount of Rs 55 crore may be placed in 2013-14,” Ghosh said.
The unchanged dividend tax proposal in the Union Budget for 2013-14 has a bearing on the placement timing, observers said.
According to the provisions of the Companies Act, 1056, the preference shares do not have voting right unless the company defaults on dividend payment to this specific group of shareholders.
The McNally Bharat stock of Rs 10 closed 3.67 per cent higher at Rs 79.15 on the NSE.