Monnet Ispat shines bright
Shareholders and traders of Monnet Ispat seem to be happy with the Strategic Debt Restructuring (SDR) guidelines being invoked. The feeling is that the light could slowly shine at the end of the long, dark tunnel.
The company is sitting on a consolidated debt of over Rs.12,500 crore and the debtors have decided to convert their unsecured loans into equity shares, giving them a major stake in the company. They plan to convert Rs.368 crore worth of outstanding debt into equity at Rs.40/share, translating into a 51% stake. The lenders will then be able to sell this stake to a new promoter within the next 18 months. The existing management will continue to run the operations.
Post this SDR, promoters stake in the company will come down from 48.59% to 24.06%.
Blackstone remains a shareholder with a 6.9% in Monnet Ispat. It is staring hard at a huge loss of value on its original investment.
The company has scheduled an EGM on 21st Dec to seek shareholders nod for the SDR.
The stock price is up over 13.5% at Rs.37.75 with an intra day high of Rs.38.90. Volumes have spiked up over 8 times.