Vijay Mallya quits from Mangalore Chemicals Board,company's stock shores up

UB Group Chairman Vijay Mallya on Monday resigned from the Board of Directors of Mangalore Chemicals and Fertilizers Ltd (MCFL) with immediate effect.

As per a filing to BSE on Monday, Mangalore Chemicals said, "Mallya, a director on the board of directors of the company, has resigned with immediate effect.”

Following the development, the company stock shot up 15.3 per cent to Rs.94.05 a piece on BSE, while benchmark Sensex was trading flat at 28,687.72 points.

Mallya had engaged in battle with Deepak Fertilisers to retain control of MCF. The reason for Mallya's decision to step down from the company was not clear immediately.

Mallya's resignation comes amidst the dramatic turn of events in the company when two competing open offers for the shares of Mangalore Chemicals concluded unsuccessfully.

Mallya had joined forces with Kolkata-based industrialist Saroj Kumar Poddar to launch a counter bid against Deepak Fertilisers.

After the open offer last month which started on October 1 and closed on October 20, Zuari-UB group combine succeeded in acquiring 48,000 shares and presently holds 38.4 percent stake in MCFL.

The company made it possible after offering a counter bid at Rs 81.60 per share. The open offer also increased the Deepak Fertilisers's stake to 31.25 percent from 25.31 per cent stake through its subsidiary SCM Soilfert Ltd.

To get controlling stake in the MCFL, Vijay Mallaya's UB group along with Zuari group need about 12 per cent additional stake. At the same time, Deepak Fertilisers would require more than 18 percent stake in the MCFL.