The Telegraph reported that IDBI Bank has picked up a 10% stake in Calcutta based steel maker Ramsarup Industries. The financial institution bought into the company after invoking shares pledged with it.

As per report, the transaction took place on July 29 when IDBI acquired 3.507 million shares in Ramsarup.

Pledged shares are collateral for a loan; invoking the shares means the lender transfers the shares to itself when the borrower fails to pay back the loan.

When contacted, Mr Ashish Jhunjhunwala CMD of Ramsarup said that “The issue has been sorted out with IDBI.”

But he did not say why the financial institution invoked the shares.

Ramsarup has about INR 1,050 crore debt on its book. It has decided to raise long term resources to cut the massive debt pile.

The board is meeting on August 13 to decide on issuing preferential shares as well as stocks to qualified institutional buyers.

(Sourced from Telegraph)