Dec 17, 2007, 13:52 GMT
Kolkata, Dec 17 (IANS) Citi Venture Capital Fund and India Equity Partners have decided to buy 15 percent stake worth Rs.2.73 billion ($69 million) in steelmaker Jai Balaji Industries Ltd to partly finance its expansion.
Both the companies have decided to subscribe to 61,18,000 and 22,41,000 compulsorily convertible debentures of Rs.326.90 each respectively, to be converted into one equity share per debenture, aggregating to Rs.2.73 billion, representing 11 percent and 4 percent of the diluted equity through a preferential allotment.
The company will simultaneously issue to the promoters and others 9.6 million warrants at Rs.326.90 each to be converted into one equity share within 18 months, a release here said.
This fund-raising exercise of Rs.5.87 billion will meet the funding required for its expansion plans. The preferential allotment is subject to approval of the shareholders in its forthcoming extraordinary general meeting.
Jai Balaji Industries has recently signed a memorandum of understanding with the West Bengal government for setting up an integrated steel plant, a power plant and a cement plant with an aggregate investment of Rs.160 billion ($4 billion).
Jai Balaji Industries has achieved a turnover of Rs.5.27 billion and a profit after tax of Rs.510 million for the half year ended Sep 30, 2007, as compared to a turnover of Rs.10.73 billion and profit after tax of Rs.620 million for the fiscal 2006-07.
The company has recently acquired the steel division of HEG Limited at Chhattisgarh and purchased 100 percent stake in Nilachal Iron and Power Ltd in Jharkhand, thereby spreading its foothold in the mineral-rich states of eastern India.
© 2007 Indo-Asian News Service
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