IDM to take 14 pc in Saurashtra Cement
India Debt Management is picking up a 14% stake in Mehtas-controlled Saurashtra Cement through the conversion of debentures into equity, reports Indulal PM.business Updated: Aug 13, 2007 01:50 IST
India Debt Management (IDM), part of the the Hong Kong-based ADM Capital (ADM), is picking up a 14% stake in Mehtas-controlled Saurashtra Cement through the conversion of debentures into equity. Saurashtra's board will meet on August 16 to consider allotment of shares to equity warrants and convertible debentures at a conversion price of Rs 35 per share.
Saurashtra Cement will allot shares worth 74.5 lakh equity shares of Rs 10 each to IDM by converting a part of the convertible debentures at a price of Rs 35 per share. This will translate into 14% equity stake for IDM. The company's shares were trading at Rs 58.35, down 0.09 per cent, on the Bombay Stock Exchange on Friday, when the benchmark Sensex dipped 231.9 points to close at 14,868.25.
Mehtas, which own close to 78 per cent in the company, will see their stake coming down proportionately post conversion. IDM had invested close to Rs 93 crore in the company through the preferential allotment route. A significant part of this investment is now being converted into equity.
Saurashtra Cement has recently appointed IDM nominee Chetan Jain as a director of the company. The company is using the capital for its investment plans, which include setting up a low cost power plant in Gujarat.
The company doubled its revenues to Rs 107.73 crore during the year ended March 31, 2007.
The proposed power plant will generate 25 MW of electricity. The project is expected to be completed in May 2008. The company is also planning to expand its production capacity from the current 1.4 MTPA to 1.7 MTPA over the next two years. The company manufactures ordinary portland cement and pozzolana portland cement, besides producing sulphate resistant cement and portland slag cement. It markets cement under the brand name "Hathi Cement".