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The promoters of Emami Ltd — the Goenka and Agarwal families — have sold 10 per cent of their stake in the group flagship, raising ₹1,230 crore in the process.
The proceeds will be used to reduce debt at the promoter-level.
Post the stake sale, the promoter-holding in Emami stands at 52.74 per cent.
The promoters had pledged the shares with debt mutual funds for ₹700 crore, which is being redeemed now. Post-redemption, this will become zero.
According to Mohan Goenka, Director, promoter debt, primarily bank loans, may total ₹2,200 crore. “(This) stake sale occurred on the floor of the stock exchange to marquee institutional investors,” Goenka said, without divulging the name of the investors.
Second block sale
This is the second block sale by the promoters. The previous sale was made in February to a group of investors including SBI Mutual Fund, PremjiInvest, Amundi, IDFC and L&T Mutual Fund. Around ₹1,600 crore was raised by that sale.
Emami, in a statement, said the promoters intend to maintain their “controlling majority stake” in the FMCG entity.
Emami Ltd, according to its last annual report, had a debt burden of around ₹118 crore until the end of FY18. However, capital-intensive businesses like Emami Cement and the hospital chain, AMRI, have high debt. According to Aditya Agarwal, Director, Emami Group, “deleveraging of debt” is the priority.
“We continue to take all steps necessary to fuel the growth of the Emami Group,” he said.
The Group intends to reduce its debt in the next six-eight months.
“The promoters of the Emami Group have more than adequate pool of diverse assets of value. With a view to further reducing the debt and reaping the benefits of such investments for the Emami Group, the process of identification of such assets has been initiated,” a company statement added.
Shares of Emami Ltd fell 7.59 per cent and closed at ₹267.30 at the BSE on Monday.
Easing the burden
Post the stake sale, the promoter-holding in Emami stands at 52.74%
Promoter debt, mainly bank loans, may total ₹2,200 crore
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