Sold! Ashok Agarwal & fly’s 14% stake in Amar Ujala to founder Rajul Maheshwari for Rs 150cr

14 Oct,2013

By Arun Kumar

 

Amar Ujala Publications founder Rajul Maheshwari along with his family will purchase the 14 per cent stake of the Ashok Agarwal and family for Rs 150 crore, two persons familiar with the development said, a move that will consolidate ownership in one family.

 

The company publishes Hindi daily Amar Ujala in northern India.

 

The deal, for which an agreement was signed recently, will be funded through internal accruals and personal debt by the promoters, one of the two persons said. Mr Maheshwari may sell shares back to the company in a buyback offer later to repay debt.

 

The agreement is part of the settlement with the Ashok Agarwal and family, which had filed a complaint against its partner at the Company Law Board (CLB), alleging operational mismanagement. Rajul Maheshwari declined to comment.

 

After purchasing the stake, the Maheshwaris are planning to reduce the company’s capital. “To reduce the paid up capital, the company will buy back its shares from its shareholders, which may either be extinguished or kept as treasury stocks that can be issued to the new set of investors in future,” said one of the persons cited above.

 

In the open offer these group companies will have the option of selling the shares and generating cash. “All the parties with respect to the memorandum of understanding are present in court and they confirm that they have voluntarily entered into the settlement and the terms of the same are binding on them. The parties shall abide by the term of the MoU,” the October 8 CLB order said. “The company (Amar Ujala) shall have the liberty to approach the CLB in term of the prayer of the present application for seeking appropriate orders under Section 402 of the Act for consequent reduction in the share capital, in the event the company buys back the shares of the petitioners (Ashok Agarwal and family) under the MoU,” said the order.

 

Last year, the Maheshwari group acquired American PE fund DE Shaw’s 18 per cent stake for about Rs 140 crore. DE Shaw was locked in a bitter battle with the promoters when it decided to divest its stake as part of its ‘exit right’ after the publisher failed to list within four years of its investment under an agreement. It asked the Indian promoters for a 25 per cent return on its investment, which was contested in the court.

 

Source:The Economic Times

Copyright © 2013, Bennett, Coleman & Co. Ltd. All Rights Reserved

Licensed to republish

 

 

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One response to “Sold! Ashok Agarwal & fly’s 14% stake in Amar Ujala to founder Rajul Maheshwari for Rs 150cr”

  1. My advtcorner says:

    Amar Ujala,top a hindi daily was launched on the 18th of April 1948 from Agra. Today, Amar Ujala has a staggering circulation of over 1,700,000 copies and a readership of over 2.87 crore in India. Additionally Amar Ujala is now also a leading newspaper in Chandigarh, Punjab, Haryana, Himachal Pradesh, Jammu & Kashmir, Uttar Pradesh, Uttarakhand and Delhi. Currently, Amar Ujala publishes a 18 page daily issue with more colour pages in every edition. AdinNewspaper Advertisers books advertisements for Amar Ujala. We book cassified/Display Ad, Tender Notice, Public Notice, matrimonial,name change and all other categories.