Jaypee Development Corp is set to launch an open offer for the acquisition of INR7.63 crores shares of Andhra Cements at INR12/share, according to reports by the Economic Times on India.
Existing Andhra Cements shareholders would be able to tender their shares by February 8, the company said in a statement.
Jaypee had inked an agreement with some Andhra Cement prompoters/promoter group firms on 15 November to acquire INR19.65 crore equity shares (66.4 per cent of the expanded paid-up share capital of the company). This includes 4.81 crore shares from the promoter/promoter group firms.
In January last year Andhra was referred to the Board for Industrial Financial Reconstruction (BIFR). However, liquidity constraints continued for want of raw materials and power supplies were also discontinued at the factory. During the 15 months ending June 2011, it suffered INR24.6 crore loss.
To revive operations, the company requires an infusion of capital but could not raise funds through a loan as it already had INR450 crore worth of debt as at the end of June.
"Hence, for revival of the company, infusion of further equity capital could be the only option. However, promoters were not in a position to infuse any further funds into the company," Andhra Cements said in the statement.