Mumbai: Sundaram FastenersThe eldest daughter of Suresh Krishna, chairman of the preethi krishnaPlanning to sell a part of it Stakes In holding company The move by US-based Preeti (59), a fourth-generation member of the renowned TV Sundaram Iyengar family, is being seen as a step towards her exit from the family business.
Preeti's share will be bought by her father, mother Usha Krishna and two sisters – Aarti Krishna and Arundhati Krishna – thereby strengthening their stake in the holding company: TVS Sundaram FastenersTo finance the transaction, the four companies will sell Sundaram Fasteners shares worth Rs 400 crore to institutional investors such as West Asian funds.
After the completion of the share purchase deal, Preeti's stake in the holding company will come down to 14-15% from 20%. Suresh, Usha, Aarti and Arundhati also currently hold 20% stake each in the holding company, which owns 48% of Sundaram Fasteners, which has a market value of Rs 28,000 crore.
Sources said the four family members, through TVS Sundaram Fasteners, will sell 1.5% stake in Sundaram Fasteners to foreign investors for Rs 400 crore through a block deal. They said the share-sale is aimed at funding another transaction between them and Preeti in TVS Sundaram Fasteners. The four members will buy a part of Preeti's stake in the holding company as she wants to reduce her stake in the entity.
Preeti is a director of Sundaram Fasteners, but she does not play as active a role in the Chennai-based company's operations as her two sisters. Aarti (55) is the MD of Sundaram Fasteners, while Arundhati (50) is the joint MD.
Preeti is settled in the US and holds a 20% stake in TVS Sundaram Fasteners through a trust controlled by her husband Ram Sundaram, a former Goldman Sachs chief. Emails sent to Ram Sundaram and Suresh Krishna did not elicit any response.
At one point, Sundaram Fasteners was part of the undivided TVS Group. Now the diversified units of the south-based group are run by different family members as part of a business separation agreement between them. For instance, Suresh's first cousin Venu Srinivasan controls TVS Motor and Sundaram Clayton.
In a common holding company, which in turn holds a listed entity, the exit of a particular family member becomes difficult as it cannot happen without the consent of all other shareholders of the holding company. This creates liquidity concerns for the selling-shareholder, said a lawyer. However, the good thing is that the entire shareholding is consolidated in the holding company and hence, voting rights with respect to the listed entity can be exercised by a common shareholder i.e. the holding company, he said.
Preeti's share will be bought by her father, mother Usha Krishna and two sisters – Aarti Krishna and Arundhati Krishna – thereby strengthening their stake in the holding company: TVS Sundaram FastenersTo finance the transaction, the four companies will sell Sundaram Fasteners shares worth Rs 400 crore to institutional investors such as West Asian funds.
After the completion of the share purchase deal, Preeti's stake in the holding company will come down to 14-15% from 20%. Suresh, Usha, Aarti and Arundhati also currently hold 20% stake each in the holding company, which owns 48% of Sundaram Fasteners, which has a market value of Rs 28,000 crore.
Sources said the four family members, through TVS Sundaram Fasteners, will sell 1.5% stake in Sundaram Fasteners to foreign investors for Rs 400 crore through a block deal. They said the share-sale is aimed at funding another transaction between them and Preeti in TVS Sundaram Fasteners. The four members will buy a part of Preeti's stake in the holding company as she wants to reduce her stake in the entity.
Preeti is a director of Sundaram Fasteners, but she does not play as active a role in the Chennai-based company's operations as her two sisters. Aarti (55) is the MD of Sundaram Fasteners, while Arundhati (50) is the joint MD.
Preeti is settled in the US and holds a 20% stake in TVS Sundaram Fasteners through a trust controlled by her husband Ram Sundaram, a former Goldman Sachs chief. Emails sent to Ram Sundaram and Suresh Krishna did not elicit any response.
At one point, Sundaram Fasteners was part of the undivided TVS Group. Now the diversified units of the south-based group are run by different family members as part of a business separation agreement between them. For instance, Suresh's first cousin Venu Srinivasan controls TVS Motor and Sundaram Clayton.
In a common holding company, which in turn holds a listed entity, the exit of a particular family member becomes difficult as it cannot happen without the consent of all other shareholders of the holding company. This creates liquidity concerns for the selling-shareholder, said a lawyer. However, the good thing is that the entire shareholding is consolidated in the holding company and hence, voting rights with respect to the listed entity can be exercised by a common shareholder i.e. the holding company, he said.