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Amar Ujala owner buys back shares from Maheshwari family; signals capital restructuring

16-October-2013
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Amar Ujala owner buys back shares from Maheshwari family; signals capital restructuring

Rajul Maheshwari and his family, founders and promoters of Amar Ujala, are buying back 14 per cent of the company’s stake from the Agarwal family, revealed a company source.

This, according to the source, is being done to ensure centralised decision-making and help the company consolidate its business under one family.

As per market estimates, the deal is valued at Rs 152 crore and will be funded through internal debts and non-cash liabilities.

Another fact that has been highlighted is that the promoter family is planning to reduce its paid up capital and find new equity partners. Paid up capital is the capital funded by shareholders.

Reportedly, there were differences of opinion over operation of the newspaper between both the families. The Agarwal family had filed a complaint against their partners in the Company Law Board under the Ministry of Corporate affairs. This agreement is part of the settlement.

The Maheshwari family can either sell the shares acquired from the Agarwal family to new set of investors or keep the shares with themselves as treasury inventory stock.

Experts we spoke to mentioned that the development can be seen from two angles. Either the promoters wants to gain more control over the organisation as it moves ahead, so they are ensured of the returns. Secondly, the company is willing to offer its shares to new set of investors. Both the angles highlight robust strategy plans for the group.

The Publication group currently runs Hindi daily Amar Ujala with 18 editions in seven states, including Uttar Pradesh, Uttarakhand, Himachal Pradesh and Jammu.

A senior media lawyer and analyst shared, “Different companies have different approaches of overhauling their present infrastructure. Either through acquisition or corporate restructuring, any one is feasible. This is an example of the latter. Recently, Network18 acquired satire comedy portal fakingnews.com to increase its digital presence along with firstpost.com. That was an example of acquisition.”

Rajul Maheshwari did not respond to our queries at the time of filing the report.

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