The Hindu Business Line : CIAL may allot shares worth Rs 52 cr earmarked for Hudco

COCHIN International Airport Ltd (CIAL) is likely to allot shares worth Rs 52 crore kept aside for Hudco - the major financier of the airport project - for over a year, to existing shareholders.

The AGM and the board of directors' meeting scheduled for August 31 are expected to take a decision in this regard, some of the directors said.

They added that at the board meeting on March 2003, it was decided to allot the shares earmarked for Hudco to the existing shareholders. But at the insistence of the Chairman of the company, the Chief Minister, it has been kept aside for allotting to the Hudco.

"It is unethical to change the decision of the board," Mr C.V. Jacob, a promoter of the company and one of the directors, told Business Line.

Had these shares were allotted to the shareholders as rights issue, the company would have made a saving of Rs 8 crore in one year, he added. "If it is announced today, within 10 days it will be subscribed to."

If the shares are not allotted to Hudco, CIAL would have to repay Rs 52 crore to it, the outstanding against the loan of Rs 172 crore.

Even some banks have offered loans at 6.5 per cent. But by allotting the shares to the shareholders, this amount could be raised and paid to the corporation, he said.

Under a one-time settlement with Hudco, CIAL has to repay Rs 172 crore of which it has already repaid Rs 120 crore. The remaining Rs 52 crore has been kept for converting into Hudco's equity in the airport company, he said.

CIAL has also taken loan at seven per cent interest for repaying the high-cost Hudco loan.