QVT Financial LP, a US-based hedge fund, has taken a strong stance against Hirco Plc’s proposal to merge two Indian subsidiaries of the Hiranandani group with itself. Holding a minority stake in Hirco, which is a real estate fund established by the Mumbai-based developer Hiranandani group and listed on the Alternative Investment Market (AIM) in London, QVT has expressed significant concerns regarding this proposed merger.
To seek the necessary approval from its shareholders for this merger, Hirco has scheduled an extraordinary general meeting on January 16 in Mumbai.
In a statement released by QVT, the hedge fund has articulated its belief that this move could prove economically detrimental to the shareholders of Hirco while disproportionately benefiting the Hiranandani group. The fund has actively encouraged Hirco shareholders to oppose the resolutions intended to facilitate this merger.
According to the statement, QVT cautions that the Hiranandani group stands to gain a substantial financial windfall and significantly increase its stake in Hirco due to the merger.
Moreover, QVT has raised concerns about the timing and remote location of the extraordinary general meeting, arguing that these factors may disenfranchise shareholders who are unable to attend.