Construction and engineering firm McNally Bharat Engineering Co Ltd will acquire a majority stake in Vedica Sanjeevani Projects Pvt. Ltd for Rs 275 crore (around $40 million), it said in a stock market disclosure.
The acquisition of 60% stake in the Kolkata-based company is expected to improve the business operations of McNally Bharat.
Vedica, which is run by the Pasari family, owns a property in Neemrana, Rajasthan with a development plan for construction of a resort-cum-residential complex.
Currently, BM Khaitan family-controlled Williamson Magor Group and Toshniwals-controlled EMC own 36% each in McNally Bharat.
The Pasari family is offloading majority stake in Vedica in lieu of stock of McNally Bharat. Pasaris are picking around 30% stake in McNally Bharat in the deal. Post the transaction, BM Khaitan group’s holding in McNally Bharat will move up from 36% to around 39% while Toshniwals will own 12.3% after stake dilution.
Post the acquisition, McNally Bharat is expected to get the engineering, procurement, and construction (EPC) contract of the Neemrana project and hence boost its order book, it said.
The process of acquisition is expected to be completed by 31 March 2017.
Founded in 1961, McNally Bharat is an engineering firm that provides turnkey solutions in the areas of power, steel, aluminium, etc. Its products include crushing equipment, screening equipment, feeders, grinding mills, mobile crushing and screening plants and skid mounting crushing plants.
In March 2015, Kolkata-based transmission tower maker EMC Ltd acquired 12.32% stake in McNally Bharat for about Rs 50 crore (nearly $8 million). Later in July, EMC inked a deal to acquire 19.77% additional stake in McNally Bharat for Rs 100 crore (approximately $15.7 million) through a preferential allotment.
In March 2016, the board of McNally Bharat approved a draft scheme to amalgamate along with its subsidiary company McNally Sayaji Engineering Ltd and EMC into Kilburn Engineering Ltd. The proposed amalgamation has received approval from the Competition Commission of India. The firm is awaiting approvals from other regulatory bodies.
Shares of McNally Bharat were trading at Rs 60.90 on the BSE on Monday, down 1.69% from the previous close in a flat Mumbai market.
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