McNally Bharat Engineering’s wholly-owned subsidiary MBE Mineral Technologies has sold its entire stake of 41.66 percent in Hayward Tyler Group of UK for approximately Rs 127 crore. Speaking to CNBC-TV18’s Ekta Batra and Anuj Singhal, Prabir Ghosh, wholetime director and group CFO of McNally Bharat Engineering says the move was part of the overall consolidation effort and plan.
According to Ghosh, the basic utilisation of the profit will be to reduce the borrowing in the company’s Singapore level. “Approximately Rs 130-140 crore debt reduction will be there and we will definitely reduce the overall debt burden of the company. As a result, there will be a bit of an interest pay out as well,” Ghosh adds.
He further adds that one good thing in the entire deal is that the company has made a profit of almost USD 2.5 million, which will be recognised in the parent company through a subsidiary profit and in Singapore this is a tax free profit.
Apart from that, Ghosh says the fund that company raised in Singapore, the main companies have given a corporate guarantee of around Rs 130 crore, which will also get released. “So, this will be our big relief to the main company balance sheet and at the same time this will be a profitable exit from my overseas investment,” he adds.
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