Promoter Of Sterlite Technologies Revokes All Pledged Shares
The promoter of Sterlite Technologies Ltd. has revoked all pledged shares in the company with immediate effect.
Twin Star Overseas Ltd., which is owned by Anil Agarwal’s Volcan Investments Cyprus Ltd., released entire pledge on 20.74 crore shares, worth 52.01 percent equity share capital, in Sterlite Technologies on June 10, according to an exchange filing.
“As communicated, we have removed the entire pledge on Sterlite Technologies, and remain committed to the highest level of corporate governance and our shareholding in the company,” Vedanta Resources’ chairman Anil Agarwal said.
This comes after questions were raised regarding promoter’s pledged shares in a conference call after Sterlite Technologies announced its fourth-quarter earnings. Typically, for companies with higher pledged shareholding by promoters, investors always fear a selloff by lenders in case of a shortfall in margin requirement.
The pledge, a collateral for loan facilities taken by Volcan Investment Cyprus, was released as per terms of facility agreement with lenders, the filing said.
Sterlite Technologies, in an exchange filing on May 6, said promoters had reached an “in-principle” agreement with their lenders and they expect the removal of pledge of shares of the company to get completed by July 2019.
Sterlite Technologies’ shares have fallen 9.6 percent since May 6 compared to a 4.6 percent jump in the Nifty 500 Index. The stock has a 12-month return potential of 61.6 percent, with eight out 11 analysts suggesting a ‘Buy’, according to Bloomberg.