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Siti Cable promoters pledge shares with IDBI Trusteeship Services
MUMBAI: The promoters of Siti Cable Network have pledged 2.78 crore (27.8 million) equity shares, equivalent to 6.14 per cent of the total paid-up equity capital of the company, with IDBI Trusteeship Services.
Through pledge creation, the company would have mobilised funds worth Rs 52 crore (Rs 520 million), if the calculation is based on the stock price .
MSOs such as Siti Cable have been on an expansion mode, particularly following the government mandated cable TV digitisation in Phase III. Consequently, these companies need adequate funding to fulfil short-term requirements.
Promoters of the company have been involved in pledging their stakes on a regular basis. Prior to the latest pledge creation, Siti Cable promoters had pledged 13.17 crore (131.7 million) equity shares, i.e. 29.1 per cent of the total paid-up equity capital.
The number of equity shares pledged by the promoters, including the recent creation, totals 15.95 crore (159.5 million), which is 35.2 per cent of the company’s equity capital.
As a result of the latest creation, the promoters have pledged/encumbered 56 per cent of their holding in the company with various financial institutions to fund Siti Cable’s expansion drive.
Promoters resort to pledging equity shares as it helps them to fulfil their immediate fund requirements. Financial institutions accept equity capital, held by promoter(s) of companies, against collateral-backed funding activity.