COMPANY LAW
| JK Paper to raise Rs 250 cr through rights issue in May Tue, 26 Apr 2011 20:41:54 +0530 |
| Country's largest producer of branded papers JK Paper Ltd plans to raise Rs 250 crore through a rights issue in May, a top company official said today. "We expect Sebi approval in mid-May and hope to raise Rs 250 crore through a rights issue to part finance our Rs 1,650-crore expansion programme," J K Paper Chief Finance Officer (CFO) V Kumaraswamy told PTI here. The company has filed a Draft Letter of Offer with Sebi and expects to announce ratio and pricing for the issue once the market regulator's approval is received, he said. JK Paper has taken up expansion project to increase the total installed capacity from 2,40,000 TPA to 3,90,000 TPA at its unit at Rayagada in Orissa. JK Paper proposes to install a new fibre line with a capacity to produce about 2,15,000 tonnes of pulp per annum, set up a new paper machine with a capacity to produce 1,65,000 tonnes of woodfree copy paper per annum for manufacturing copier paper and other multi-functional office paper grades and installing a captive power generation facility of 55 MW. The company has finalised the orders for all major machinery of the project on a fixed price basis and the new plant will be ready by October 2012, Kumaraswamy said. The capex will be funded through Rs 150 crore of internal accruals, Rs 250 crore of rights issue, Rs 225 crore of FCCB issue and Rs 1,050 crore of debt, he said. The company is also issuing unsecured unlisted Foreign Currency Convertible Bonds (FCCBs) up to an amount of 35 million euro (about Rs 225 crore) on a private placement basis. The company will issue the FCCBs on a private placement basis to three European development finance institutions namely, FMO, DEG and Proparco. The FCCBs are convertible into equity shares of the company at an initial conversion price of Rs 65 per share. The price represents a premium of 13.5% over the closing price on NSE on April 8, 2011. The FCCBs are redeemable between the fifth and seventh years and are convertible into equity shares anytime after 3.5 years. The company expects robust demand in premium quality paper in the country. It has raised the price of its printing papers by 3.3% effective April, 2011, following the increase in raw material prices, Kumaraswamy said. |
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