The Mcleod Russel (India) share price hit the 10 percent upper circuit in the morning session on September 21, a day after media reports said that Carbon Resources has expressed its intention to acquire the debt-laden company.
The Kolkata-based electrode paste producer has sent a non-binding letter of intent to the lenders to Mcleod Russel to acquire a controlling stake in the company, which belongs to the financially stressed Williamson Magor group.
Carbon Resources picked up a 5.03 percent stake in McLeod from the open market on September 16, media reports added.
According to sources, in the letter, the company offers to infuse upfront equity worth Rs 300 crore and a debt of Rs 945 crore to resolve Mcleod Russel’s outstanding debt. The tea maker currently has a debt of over Rs 1,700 crore.
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At 09:51am, the stock was trading at Rs 41.10, up Rs 3.70, or 9.89 percent, on the BSE. There were pending 'buy' orders of 1,444,570 shares, with no sellers available. The scrip has touched a 52-week high of Rs 41.10.
Mcleod Russel in a clarification to exchanges said that the company has not received any communication or documentation in relation to such acquisition, except for a statutory disclosure from CRPL, under Regulation 29(1) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, through email on September 19, 2022 intimating the company regarding the purchase of 52,50,000 (5.03 percent) equity shares of the company.
"Since the company has not received any communication from CRPL, except for the disclosure under Regulation 29(1) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (as stated above), it is not in a position to comment on nor is it aware of the reasons for any increase in volume of security of the Company," it added.
Mcloed Russel is on a continuous upside circuit level since last few sessions with high volumes and trading above all short term moving averages. We don’t recommend to buy fresh positions, said Kush Ghodasara, CMT, Independent Market expert.
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