Chennai, Oct. 23
Asian Debt Management Hong Kong Ltd, a Hong Kong-based fund manager, which had picked up a 7.67 per cent stake in India Cements Ltd through a preferential allotment, has substantially reduced its stake in the company through open market sale.
India Cements decided in December 2004 to go in for a preferential allotment of warrants, some of which were convertible into equity shares, as part of its fund-raising efforts to reduce its debt. The company was also implementing a corporate debt restructuring programme approved by its lenders.
Accordingly, the warrants were to be converted into equity shares of Rs 47 each, of face value Rs 10 each.
In July 2006, ADRC (of Asian Debt Management) decided to exercise its option to convert the warrants into equity shares and was allotted about 1.58 crore equity shares, resulting in a 7.67 per cent stake in India Cements. It also had two nominees on the board of India Cements.
Subsequently, ADRC sold 5.80 per cent of its stake in India Cements through the open market in two tranches in August 2006, when India Cements' shares were trading in the region of Rs 190 a share. ADRC now has a 1.75 per cent stake in India Cements, according to information available on the stock exchanges.
At the end of September 2006, the promoters holding remained more or less the same at 26.89 per cent stake, compared with the previous quarter. Institutions and foreign institutional investors hold 31.07 per cent, up from 28.85 per cent at the end of the first quarter of this year.