Mannesman Sachs to exit from Sachs India

A two member bench of the board also permitted Sachs India to restructure its capital by issuing 10 lakh shares of Rs 10 each at a premium of Rs 180 per share on a preferential allotment basis to Mannesman Sachs.

The preferential allotment would also be tranferred to Dasgupta later. Mannesman has indicated that the transfer of shares was going to be on the basis of goodwill and was not likely to involve any cash transaction.

The BIFR bench also agreed to grant exemption from Securities and Exchange Board of India (SEBI) regulations pertaining to allotment of shares on prefrential basis and sale of lock-in shares within a period of three years.

The Bench observed that the German company should be allowed the fair exit considering that they had infused funds to Rs 35 crore. However, the Bench said that Mannesman Sachs will continue to provide corporate guarantee till the entire liabilities of banks and financial institutions are settled as per the agreement reached between them.

This would be in addition to the personal guarantee of the Indian promoter Dasgupta and first charge on fixed assets of Sachs India, the Bench said. The Bench also directed State Bank of Patiala and Canara Bank to release working capital as provided in the rehabilitation scheme sanctioned by the Board in 1997.

BIFR also allowed for change of board of directors, withdrawal of Mannesman Sachs nominees and appointment of Adarsh Dasgupta as managing director. Sachs India, formerly Sirmour Sudburg was declared a sick industrial company by BIFR in 1993.

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