Date:11/05/2006 URL: http://www.thehindubusinessline.com/2006/05/11/stories/2006051103351500.htm

Back Mirc Electronics promoters may part ways

Jayanta Mallick

Family holding of 53.29% is mainly through Guviso Holdings

Kolkata , May 10

The Mirchandanis, promoters of Mirc Electronics, the company which makes the Onida brand of TVs and other consumer durables, seem to be parting ways. Mr Sonu Mirchandani and his brother-in-law, Mr Vijay Mansukhani, have appointed a merchant banker last week to find a buyer for their minority holding (effectively little over 26 per cent) in the company.

Mr Gulu Mirchandani, Chairman of Mirc Electronics, and the elder brother of Mr Sonu Mirchandani, however, denied having any knowledge of such a move to Business Line over telephone from his office in Mumbai. Repeated attempts at reaching Mr Sonu Mirchandani, did not, however, succeed.

According to sources close to the development, the move to sell the stake comes after protracted negotiations among the key family members regarding the pricing if the senior Mirchandani was to buy the block of shares of the other promoters. Family holding of 53.29 per cent in Mirc Electronics is mainly through Guviso Holdings Ltd, an unlisted entity.

The sale, if effected, is likely to trigger the takeover code as the existing shareholders' agreement of Guviso would not come in the way of such a share transfer to an outsider, experts maintained. Incidentally, the name Guviso represents three key members of the family, namely, Gulu, Vijay and Sonu.

According to corporate law experts, as Guviso does not have any other business than holding of shares in Mirc, its stake change would be considered as one altering the control of Mirc Electronics for purposes of takeover law. While Mr Vijay Mansukhani is on the board of Mirc Electronics, Mr Sonu Mirchandani is not. Mr Sonu Mirchandani runs Monica Electronics, which manufactures a range of white goods including CTVs. Under an arrangement with Monica, Mirc markets these products under Onida brand. Mirc was started after two Mirchandani brothers had opted for the first round of separation.

Mr Gulu Mirchandani explained that some five years ago Mirc bought over the total interest in the Onida brand.

The Mirc stock has been witnessing surge in traded quantity since the previous Wednesday. It closed today at Rs 22.85 with a traded volume of 4.43 lakh shares (12.12 lakh shares on Tuesday) on the NSE and 3.28 lakh shares (9.77 lakh shares) on the BSE. The NSE figures also suggest a very high rate of delivery - between 50 per cent and 72.5 per cent in the last three trading sessions.