Germany’s Merckle family may have to surrender a 53 per cent stake in HeidelbergCement to a group of banks, according to agency reports. It’s not clear what impact this would have on Mysore Cements, an Indian company in which the German firm holds a 54.89 per cent stake.
On Monday, news agency Bloomberg reported that the Merckle family had been forced to pledge their stake in HeidelbergCement to a consortium of 30 banks, led by Commerzbank, Deutsche Bank and Royal Bank of Scotland, to raise funds to keep a few investment companies, owned by the family, afloat. The banks demanded the stake in return for a US$971m refinance package to the investment firms, according to the report.
Market watchers said the move will not have any material impact on Mysore Cements, at least for now since the shares are pledged but there had been no transfer of ownership.
But they said things could change if the banks offload the pledged shares to a strategic investor. In such a scenario, the buyers of HeidelbergCement’s stake will have to make an open offer for Mysore Cement’s local investors, since more than a 15 per cent stake in the Indian company will change hands.
If the international banks assumed ownership of the shares because of any default, that may not trigger an open offer since it may not amount to a change in management.
On Monday, the Mysore Cements stock closed at INR15.80 on BSE, up from the previous close of INR15.56 on a day when the benchmark sensex closed with a loss of 171.56 points.