The Hindu Business Line : Simbhaoli Sugar Mills files for rights issue

The company is offering 87,84,622 equity shares of Rs 10 each for cash at a premium of Rs 45-50 (issue price band of Rs 55-60) per equity share on rights basis to the shareholders of the company in the ratio of four equity shares for every five held on record date, aggregating Rs 48.32 crore to Rs 52.71 crore.

The issue aims to meet the capital expenditure for increasing the crushing capacity of the Simbhaoli sugar division to 9,500 tonnes crushing per day (tcd) from 7,500 tcd by adding 2,000 tcd equivalent raw sugar facility, for long-term working capital requirement and to reduce overall indebtedness by repaying a part of the outstanding borrowings.

The company has drawn up the business plans for the expansion of crushing capacities at its Simbhaoli and Chilwaria units to 15,500 tcd by adding 4,200 tcd by March/April 2006, with a capital outlay of Rs 50 crore.

During the fiscal 2004-05, the gross turnover touched Rs 509.42 crore, against Rs 338.99 crore during 2003-04. Sales (net of excise) including other income was Rs 395.33 crore (Rs 233.34 crore).

Thanks to the realisation of a higher unit price and concentration on production of value-added products, the company's profit before exceptional items and tax touched Rs 46.80 crore, against a loss of Rs 6.37 crore in 2003-04. Profit after tax and exceptional items reached Rs 11.85 crore as against a loss of Rs 4.08 crore the previous year.

The company imported 71,000 tonnes of raw sugar for processing during the last fiscal. It plans to process over one lakh tonnes of raw sugar during the sugar year 2005-06, through energy saving measures.

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Simbhaoli Sugar Mills files for rights issue