Shanthi Gears in restructuring mode

Promoters of Shanthi Gears, the city-based makers of industrial gear boxes are on a consolidation mode with the CMD P Subramanian acquiring the entire stake held by daughter S Sangeetha as a gift.

With this transaction, Mr Subramanian’s personal stake in the company would go up to 35.15% from 20.4%. The transaction would be completed on next Wednesday. This move is an attempt by the company, which is tackling a slowdown in orders and labour strife, to reassure its customers and shareholders.

As the entire 14.75% stake (about 1.2 crore shares) held by Ms Sangeetha is being taken as gift, it would not attract long-term capital gains tax. In all, the promoters have 44.7% stake in the company.

Incidentally, Ms Sangeetha, the second largest shareholder among the promoters in Shanthi Gears, was also involved in the company’s operations. But now, Mr Subramanian has taken complete charge of the company.

The Rs 253-crore Shanthi Gears was reportedly in talks with Belgium-based Hansen Transmissions for a stake sale in 2008. But it didn’t go through.

The company, which had six units in Coimbatore has also restructured operations and has production only in three locations now.