The Lloyds Group (Finance,Steel,Real Estate) has destroyed all stakeholders this past decade and more….Promoters,Guptas, have surely a lot of ‘gupts’ that they may never disclose….Several years ago,and during the mess they had created,I happened to be introduced to one of the sons,at a dinner party….this guy was nonchalant about the severe anxieties that shareholders and depositors were experiencing…in the mid 1990s the group had invested in real estate at high prices with short term debt,in the hope of making fast gains….realty crashed and so did this Group….Debt Default was inevitable…..and this Son merely stated “Real Estate Prices will rise again in a few years …so let the shareholders and deposit holders wait ! ” I had moved away from this guy,lest I got into an argument with him and embarrassed the host
One of the Group Companies,Lloyds Steel, became a BIFR Case.Now over a decade later,this company was on upper circuit today at Rs 10+ with nearly a million shares in volume on BSE….so what’s the story ? Turnaround for this treacherous scrip ! ?….
There’s an EGM on New Year Eve,December 31,2009 for preferential allotment of warrants to the Promoter group companies….the conversion within 18 months of allotment will triple the promoter stake from 18% to 54%….Settlement of Debt of over Rs 1000 crs was being continuously negotiated and some success was achieved in Q2 of FY 10 for a part of it….so fresh infusion of Funds,Settlement of Debt,significant revenues of nearly Rs 500 crs from the Engineering Division, which services a blue chip clientele,all augurs well for Lloyds Steel
I daresay,Looks Like the shareholders of Lloyds Steel may well be rewarded in 2010 for their forced penance for their sin in investing in Lloyds Steel in the past !……Promoters,obviously have little money to infuse Equity upfront…so they are resorting to a big preferential allotment of warrants that will convert to millions of shares for them to triple their stake to 54%….making them the biggest beneficiaries of any turnaround !
Keep an eye on Lloyds Steel in 2010