India Cements plans pref issue to QIBs
India Cements plans to issue equity shares to qualified institutional buyers to raise Rs 592.50 crore, according to information provided by the company to the stock exchange.
The company, which last week obtained shareholders approval for the issue, will offer 207.89 lakh equity shares of Rs 10 at Rs 285 a share with premium totalling Rs 592.50 crore ($150 million). After allotment, the paid-up capital will increase to Rs 281.16 crore from Rs 260.37 crore now.
The company recently announced that it would raise the capital to fund a Rs 1,450-crore expansion plan that would double its cement production capacity to 18 million tonnes over the next two years, and to set up a 40-50 MW captive power project and buy two ships for coal transport.
It would set up two cement plants in Rajasthan and Himachal Pradesh with a total capacity of 3.5-4Mta. The company has several mining leases in these two States and is looking at leases in Madhya Pradesh. Work on the greenfield projects would start in March 2008 with production expected to commence in January 2010.
Its ongoing expansion programme would be completed by mid-2008, taking its production capacity to 14tMt from the present 9Mt.
India Cements is also strengthening its coal supply chain through the purchase of two 40,000t capacity ships to cap the cost of coal freight. The company imports over 9 lakh tonnes of a coal a year from Indonesia. Apart from the availability of coal, the freight is a concern. Landed cost had in recent times increased three times to about $120 a tonne with freight alone costing $50. A division within India Cements would operate the ships.
Published under Cement News
