VCCircle

[Via The Economic Times:] P D Narang, a director in the Delhi-based Dabur Group, has joined the board of Punjab Tractors Ltd. Now the Burmans of Dabur are expected to play an active role in the management of Punjab Tractors. What is important here is that private equity investor Actis which has a significant stake in PTL will now be able to exert a bigger control over the estranged management with the help of Dabur.

The Burman family had acquired an 11.2 per cent stake in PTL last year. “I will be a non-executive, independent director on the board. I will assist the management of the company in creating value for shareholders. We believe Punjab Tractors is a good company. We will help in making it a great company” Mr Narang told ET. Sources said the Dabur group will leverage its position on the board to play the role of an ‘active investor’. It has studied the operations of Punjab Tractors and believes there is scope for improving the operations of the company and enhancing shareholder returns. It is felt that the tractor company is at the same stage of its life cycle as Dabur India was a few years ago.

This statement is significant since the Burmans and Actis collectively own 40 per cent in the company. The relationship between Actis and the Punjab Tractors management, led by MD Yash Mahajan, has been strained for a while.