MS Shoes is a company incorporated in 1986. The company has been into 100% exports and has been star trading house doing 100% of exports. The company was individually promoted by Pavan Sachdeva. It came out with a public issue in the year 1992 which was oversubscribed more than 50 times. It came out with another large public issue in the November, 1993 which was also oversubscribed by the public for more than 20 times. There had been overwhelming response of public in respect of the IPO’s of the company as exports jumped for more than 60 times from 1986 till 1994. The company being cash rich having huge reserves decided to diversify to yarn project as well as in hospitality sector to expand its horizons. It attempted the bids floated by Hudco in July, 1994 for 5 star hotel land and a constructed four star hotel by Hudco comprising of 363 rooms, 9 restaurants and 25 shops. The promoter Pavan Sachdeva had the vision for the said property and turned out to be successful bidder of these properties as against Oberoi Hotels, Asian Hotels and others. The total bid was Rs. 177.10 crores for which Hudco issued the allotment letters. To raise money for these projects MS Shoes planned to come out with the public issue for Rs. 350 crores for which 267 underwriters underwrote the public issue out of which various banks also underwrote the said public issue which opened on 14.2.1995. Brokers took up their large positions in the stock market on the shares floated earlier in 1992 & 1993 by the company and the share prices rose to Rs. 450/- which was market driven and considering the valuable projects of the company. The brokers defaulted to pay towards the purchase of shares due to the large positions taken by them. The public issue was devolved on the underwriters due to undersubscription of public issue. MS Shoes sought arbitration under the underwriting agreements against 267 underwriters and High Court of Delhi appointed the Retd. Judge of High Court as Arbitrator to adjudicate the disputes between the company and the underwriters. The said order was passed by High Court on 14.3.2007 in pursuance to which awards have been passed in favour of the company in June, 2012 out of which more than Rs. 50 crores awards have been decreed in favour of the company and the balance Rs. 48 crores awards are under consideration for passing the decree. MS Shoes is a debt free company and has no liabilities /debts from any of the banks/financial institutions since the company itself is cash rich having a paid up capital of Rs. 142 crores. MS Shoes has offered to buy the public shares to its existing public shareholders and presently the promoters are holding more than 95% of the equity.
Posted on: Mon, 21 Jul 2014 10:47:12 +0000
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