Gesco Corporation has appointed law firm Amarchand Mangaldas & Suresh A Shroff and Kotak Mahindra Capital Co as advisors to work out a scheme of arrangement with Mahindra Realty & Infrastructure Developers, the wholly owned subsidiary of Mahindra & Mahindra. This decision was taken at a meeting of the Gesco board today.
N M Raji & Co and Kalyaniwala & Mistry have been appointed as valuers. Company executives, however, declined to comment on whether the scheme of arrangement would entail a merger of Gesco with Mahindra Realty.
Arun Nanda, president of Mahindra Realty, declined to comment on the issue, while Gesco managing director Ghanshyam Sheth could not be reached for comment.
The Gesco Corporation scrip continued its northward movement. The stock closed high at Rs 17.85 on the Bombay Stock Exchange today compared with its previous close of Rs 16.80. More than 11,835 shares were traded.
Mahindra Realty is currently the largest shareholder in Gesco with a 39 per cent holding. It became a shareholder after it walked in as a white knight to counter the hostile raid by real estate developer Abhishek Dalmia. Subsequent to the arrangement between Mahindra Realty and Gesco, the original promoter Sheth owns only around a 26 per cent stake.
Ghanshyam Sheth, while bringing in Mahindra Realty, had also agreed to give up control over the board. According to the agreement, the two were to have representation in a 3:2 ratio, with the Mahindras dominating the board.
