Kalindee Rail Nirman (Engineers) prefers Texmaco Rail as an equity partner because Texmaco has prior experience in the railway business, said promoters Kalpana Gemini and Shambhavi Gemini. Apart from belonging to the promoter family, the two are also on the board of Kalindee Rail.
Facing an open offer from Jupiter Metals last week for a hostile takeover, Kalindee Rail decided to issue preferential shares to Texmaco Rail through a hurriedly called board meeting on Saturday.
“Texmaco is already in the railway sector, they understand the business. We have done business with Texmaco for the past two-and-a-half years, buying steel girders from them. OM Metals does not have experience in the railway segment,” said Kalpana Gemini.
Kalpana joined the Kalindee Rail board after the death last year of her husband Lt. Arvind Gemini, a promoter who also held the Managing Director position.
Post-preferential allotment, Texmaco holds approximately 24.9 per cent of the paid-up equity share capital of Kalindee at Rs. 65 per equity share.
IN NEED OF FUNDS
“All the members of the board supported the move. The company needed funds. Texmaco has agreed to put in the required funds. R.D. Sharma will continue to be the Chairman and Managing Director,” added Kalpana.
Sharma, Arvind Gemini’s father and promoter of Kalindee Rail, was named the company’s Chairman and Managing Director following Arvind’s demise. Previously, Sharma was the company’s Chairman.
Shambhavi Gemini, the 24-year-old daughter of Kalpana and Arvind Gemini, defended the company’s position even as Jupiter Metals contested Kalindee Rail’s board meet on Saturday as being without sufficient notice.
“We have followed all company norms regarding board meetings. These are special circumstances, and required an emergency meeting,” she said. “After the preferential allotment (Kalindee to issue extra shares), the current promoter holdings will change. But the immediate need was to get funds into the company,” she added.
But, OM Metals, through Jupiter Metals, continues to eye a controlling stake in the company. Speaking for Jupiter Metals, Vikas Kothari, Executive Director, OM Metal Infratech, said: “As far as we are concerned, there is no competing offer to our open offer. So, the open offer, at Rs 65 a share, to get a controlling stake in the company still stands.”
Kothari added that Jupiter Metals would await a SEBI decision on the Saturday board meet. On why OM Metals wanted a stake in Kalindee Rail, Kothari said: “We are an engineering procurement construction firm with exposure in the hydropower and roads segment. We want to expand into the railway EPC space through Kalindee.”
Kothari, however, added that OM Metals, the listed arm of the group, would not fund the Kalindee stake acquisition. After rallying from Rs.59.8 on Wednesday to Rs.72.55 last Saturday, Kalindee Rail’s shares fell by over five per cent to Rs.68.8 on Monday on the BSE.