It is better that the payout is being invested in copper plant. A loan against court order was already taken and it gives a high confidence in the payout being realized. At least 50 percent of 5k cr is allocated for capex. The rest of the amount is big question.
As a minority shareholder, I have no interest in getting a dividend as it is not tax friendly. Instead the appreciation in stock price is preferable in the medium-to-long term.
Just see what happened in Maharashtra Apex. After getting a big sum in lieu of Kurlon share, Pai family has not paid a penny to shareholders. This is only an example and all are aware of many such instances. Is it not a case of oppression of minority interest? If Kiri can win the case, can’t minority shareholders of Kiri can do anything? But yes, I forget that it is India. Here Govt, RBI, SEBI, Courts ctc make hue and cry about small investors but never making a fair case for them ultimately.
At 600, the market is pricing 0% return on all money in company assuming the 600 million comes in. Yes corporate governance esp the preferntial allotment was not great but Manish was always asked why you not increasing stake. When he does also guys complain. Personally the pref allotment was one of main reasons for my investment. Increases skin in the game. Just my two bits
Rightly said, LEEL electrical is another example where promotor siphoned off all proceeds received from Havells despite Purinju having a large stake, even a prominent investor could not do much. Its a huge risk always. i was invested in Kiri in 2017, exited by 2018 as it looked a mirage for a minority investor and will remain, u can expect a large dividend and rest will be gone. 
The promoters in their earnings call have mentioned that they are personally leveraged to the hilt. This in my view improves chances of a better payout from the proceeds they will receive from the stake sale.
Existing Promoter Debt - great if anyone can share a rough estimate (It may give an estimate of the likely payout assuming that they would like to reduce most of their debt obligations from the dividend that they can declare.)
You are welcome to your views. But the taste of pudding is in its eating. We know that hefty dividend payout is not shareholder friendly. So also short term appreciation in stock price. Then you would advise not to book profits to avoid STCG. Sorry. I don’t prescribe to such ideas.
I would have welcomed investment in core business. But Copper is an altogether different sector. I am sure we will get plenty of good opportunities to invest in more lucrative sector during these 2-3 years. Moreover, Manish Kiri is yet to clarify his position regarding distribution of other 50%.
Examples are galore where management has distributed almost 90% of extra income. They could have started big projects with the funds. But they did not. So it is ethics and fairness. And Manish Kiri is yet to show his qualities in this field.
In the preferential issue the promoters have committed Rs 492 crores. They have already paid total Rs 320 crores (Rs 250 crores as 50% and 1st tranche around Rs 70 crores). Let us assume all of this is debt funded and need to be repaid from the eventual payout. With interest by the time the payout is made the indebtedness might increase to ~ Rs 550 crores.
Assuming that the promoter stake is 41.7% and he is paying close to 40% tax, you will require a dividend payout of Rs 2000 crores from the Dystar jackpot. On diluted share capital this will be dividend of approx. Rs 300+ per share.
Company will yet be left behind with ~Rs 3000 crores for its new business initiatives as well as the old business lines.
2 questions that are most pertinent:
How much money have the promoters borrowed totally?
What other alternatives would the Lenders be comfortable with?
Views welcome. Happy to be corrected in case I have missed something.
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The loan has been taken by the company from the special situations lender not by the company. Promoters have just kept their stake as collateral. How promoters funding their 492 crs, I have no idea
here are the details. Loan taken by KIri subsidiary. Promoters just providing guarnatee
4E50A9B5_DC13_40FB_9786_14CE54A9EC6F_175820.pdf (335.4 KB)
Thank you for pointing this out. The Special Situation Funder loan is at company level. Clarity on extent of promoter debt and source of funding will impact likely outcomes for dividend payout. The assumptions of the earlier post will be valid only if entire amount is debt funded and needs to be repaid.
