New Delhi: McNally Bharat Engineering will raise Rs 100 crore by selling shares to EMC Ltd, which will also launch an open offer worth over Rs 131 crore to the company's public shareholders.
"Mcnally...Has entered into an agreement with EMC Ltd and Williamson Magor Group to enable an additional equity investment of up to Rs 100 crore as primary equity capital into McNally," the company has said in a filing to BSE.
This capital infusion of Rs 100 crore by the company will be done through a preferential allotment of one crore shares to EMC at a price of Rs 100 apiece.
"The company shall use the proceeds...To meet its working capital requirements and thus expedite execution of the various projects in hand," it said.
Post the preferential allotment, EMC's stake in McNally will increase to 29.64 percent.
To comply with Sebi norms, EMC along with others will launch an open offer to acquire additional 26 percent stake in McNally. The offer would be worth over Rs 131 crore.
EMC Ltd, a service provider for power transmission and distribution firms, had earlier in March invested Rs 50 crore in McNally through its group company MKN Investment for a 12.5 percent stake in the company.
As per investment pact among existing promoters, EMC and the company, McNally would be jointly controlled by existing promoters and EMC with both parties having equal board representation in McNally and its subsidiaries.
EMC has proposed names of Manoj Toshniwal and Manish Agarwal as its nominees on McNally's board of directors.
"The partnership with EMC will strengthen McNally to capitalise on the large business opportunity for the company over the next ten years...," McNally Chairman Aditya Khaitan said.
Meanwhile, an open offer has been submitted to the shareholders of McNally by EMC Ltd along with MKN Investment Pvt Ltd, McLeod Russel India Ltd, Williamson Magor & Co Ltd, Babcock Borsig Ltd, Williamson Financial Services Ltd, Kilburn Engineering Ltd, Bishnauth Investments Ltd and Amritanshu Khaitan for acquiring 1.31 crore shares or 26 percent stake.
The shares of McNally closed at Rs 94.90 a scrip, up 19.97 percent on BSE on the news of open offer while that of Kilburn Engineering closed at Rs 56.35 a share, up 7.54 percent.
