The Hindu Business Line : Rain Commodities plans preferential issue

THE board of directors of Rain Commodities Ltd at its meeting held on Monday has recommended a preferential issue of 50-lakh equity warrants to Citicorp Finance (India) Ltd, 15.99-lakh equity warrants to Sujala investments Pvt Ltd and 34-lakh equity warrants to Meghamala Enterprises Pvt Ltd.

The company has informed the stock exchanges that the equity warrants would be issued at a price of Rs 40 (Rs 10 face value + Rs 30 premium) for each warrant with an option to convert into equity shares within a period of 18 months from the date of allotment of such warrants.

Rain Commodities proposes to use a substantial portion of this investment to capitalise its 100 per cent subsidiary - Rain Industries Ltd, a producer of ordinary Portland and blended cements.

Further, Citicorp Finance (India) Ltd is investing in debentures of approximately Rs 115 crore to be issued by Rain Industries.

The proceeds would be used to settle and restructure loans of certain banks currently financing Rain Industries.

The company said the investment was approved at a corporate debt-restructuring (CDR) meeting held on March 31.

The CDR also approved the reduction of interest rates on loans from 13 per cent per annum to 9.5 per cent.

Rain Industries produces ordinary Portland and blended cements with two locations in Andhra Pradesh at Nalgonda and Kurnool with a combined capacity of 1.6-million tonnes per annum.

It currently markets the cement production in South India under the brand name Priya Cement.

The company has decided to seek the approval of its shareholders at an extraordinary general meeting on April 30 for the proposals recommended by the board.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page