PAL AGM adjourns due to legal issues

Kailash Rajwadkar

Mumbai, April 30: In an unexpected turn of events, the annual general meeting of Premier Automobiles Ltd (PAL) was adjourned due to certain ‘legal issues’ here on Monday.

PAL shareholders, who had gathered in large numbers at the venue, were at sea when PAL, chairman, VL Doshi said that the meeting has been adjourned on account of some legal issues cropping up at the last hour. Though no details were officially available on the ‘legal issues’, dejected shareholders said that the financial institutions had apparently raised concerns on the sale of surplus land.

PAL holds residential as well as industrial real estate at Kurla — a prime location near the Bandra-Kurla complex in Mumbai. The company had announced that it is in the process of evaluating several proposals from eminent developers, such as Gesco, Tata Housing, Godrej Properties and Rahejas for this project.

Financial institutions hold around 19 per cent stake, post-conversion of the partly convertible debentures in PAL. Prior to the conversion, PAL owed around Rs 100 crore to financial institutions of which ICICI had the highest exposure at Rs 70 crore followed by other institutions. In addition, the FIs have yet to receive another Rs 125 crore in the PAL-Peugot joint venture in the form of partly convertible debentures.b In its report on restructuring of PAL, ICICI had recommended to either lease or sale of PAL’s press shop for raising fresh funds. Attempts to get a feedback on entire episode from the lead financial institution ICICI proved futile.

Meanwhile, the company has entered into a memorandum of understanding with a leading developer in Pune for the development of a part of the unutilised real estate at the company’s machine tools division at Chinchwad for a total consideration of Rs 10.75 crore. The company has already received Rs 1 crore as earnest money deposit, the annual report stated.