While McNally didn't issue any dividend to equity shareholders for 2015-16, it had recommended a dividend of 11.5% to its preference shareholders in May.
BM Khaitan group raised shareholding in McNally Bharat Engineering to 23.26%, potentially allaying the fears of investors who were jittered by reports of the engineering firm delaying interest payments to its preference shareholders.
In line with the overall market sentiment, the stock was under pressure during the initial hours of trade. Moreover, there were reports of McNally defaulting on interest payment to preference shareholders, but the company denied it later during the day.
While McNally didn't issue any dividend to equity shareholders for 2015-16, it had recommended a dividend of 11.5% to its preference shareholders in May.
"The company has already provided for the dividend for the quarter ending March 31 in its books. Since the company is incurring losses, the same shall be paid once the accounts are approved at the forthcoming annual general meeting of the company," McNally told exchanges to soothe the investors.
But before company officials came up with the clarification, McNally disclosed that one of the promoter entities, the BM Khaitan group company Williamson Magor & Co has raised its stake to 23.26% of the paid-up capital from 19.51%.
This pushed up the stock by up to 12% during afternoon trade but there was a significant correction after it was realised that the increase in the stake, regarding which the exchange was informed, was a consequence of conversion of warrants, a decision which was already taken a day before on Thursday.
"We have acquired 25 lakh equity shares of Rs 10 each of McNally on September 8 by way of conversion of balance 25 lakh warrants into one equity share each out of 30 lakh warrants allotted to the company on March 15," Williamson Magor & Co told exchanges.
Even as the Khaitans got their warrants converted, the other promoter of the company, the Toshniwal family-owned EMC, in July had to pledge part of their holdings for loans against securities.
The Toshniwals were brought in by the Khaitans last year as co-promoters to revive McNally Engineering. However, even that didn't quite help the ailing McNally revive and then in March the two families decide to create a Rs 7,000-crore engineering entity by merging their respective engineering businesses, including two listed entities of the Khaitans and EMC Ltd, an unlisted EPC player in the power sector with a global presence.
"The company faced severe working capital crunch during the year due to non-payment of dues by certain private and public sector customers and delayed execution on part of some customers. This has affected the execution and billing. The borrowing level increased substantially which also created pressure on cash flow and profitability due to high interest burden," the company has disclosed in its annual report for FY16 when its losses jumped threefold to Rs 304 crore from Rs 114 crore.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "McNally")
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}