Action Construction denies talks of stake sale to L&T Cap

Sorab Agarwal, managing director, Action Construction Equipment, denies the news that L&T Capital is planning to acquire stake in the open market of Action Construction Equipment (ACE).

Below is the edited transcript of his interview to CNBC-TV18.

Q: There are talks that L&T Capital is acquiring stake in the open market of Action Construction Equipment (ACE) and has struck a deal with some mutual funds to acquire around 10 percent stake in your company. Are you aware of any such moves?

A: No. The news is totally baseless.

Q: Have you checked with any of these mutual fund entities who own quite a bit of your stake or have you been in touch with L&T Capital yourself?

A: Not really. No one from our side has any knowledge about such details.

Q: How much holding do mutual funds have in your company and who is the largest holder?

A: It should be around 10-12 percent and JM should be the largest as of now apart from some FIIs, and Kotak India Focus fund that are holding stake in our company.

Q: You are having some debt issues though. There is an operating average issue on the company – are you looking to raise some money or capital infusion in order to help the debt side?

A: We do not have any long-term debt. Yes, there has been a slight increase in the working capital utilization over the last six-eight months, but I am sure that by end of December it will fall in place because certain inventories have been carried forward which are not consumed I don't think there is any requirement to raise any funds as of now.

Q: How is the core cranes business doing at this point because we saw a fairly substantial dip in your revenues and profits from that division in the second quarter?

A: As a matter of fact, it has been quite slow in the last 6-8 months but in the last 1-2 months, we do see some green shoots and we have bottomed out. I only see better times from here but you never know. The country also has to start to do well along side.