The Hindu Business Line : South Asian Petrochem to make pref issue of 9.4 lakh equity shares to IFCI

PET resin producer South Asian Petrochem, of the Dhunseri Group, has decided to make a preferential issue of 9.4 lakh equity shares to IFCI. The shares would be issued after the conversion of the optionally fully convertible debentures (OFCDs).

"We have already taken shareholders' approval," Mr C. K. Dhanuka, MD, told Business Line, while referring to the terms set at the time of issue of OFCDs. The debentures carried a zero per cent rate of interest. According to Mr Dhanuka, the debentures would be converted into equity shares of Rs 15 each.

Lately, the company has seen its fortunes improve. It ended 2004-05 with a net profit of Rs 18.32 crore on a turnover of Rs 833 crore. In the first quarter of the current financial year, it earned a net profit of Rs 11.26 crore on a turnover of Rs 265.70 crore.

Debentures issued by the company along with its initial public offering in December 2001 were worth Rs 100 each.

The cost of its PET project at Haldia, West Bengal, was pegged at Rs 450 crore. Of this, the promoters contributed about Rs 115 crore as equity, while Rs 74 crore came by way of investment by the public. The issue comprised 50 lakh equity shares of Rs 10 each and Rs 69.50 lakh debentures. Funds were also raised through term loans from IDBI, IFCI and Exim Bank.

The South Asia Petrochem stock is trading well on the bourses in terms of volume. On Monday, it closed at Rs 18.40. Volumes are also reported to be improving. The stock 52-week high and low are Rs 21.760 and Rs 7.20 respectively.

The earlier round of conversion related to two-year debentures carrying an interest of 14 per cent per annum payable half yearly. On maturity, these were converted to equity shares. The rating agency ICRA had assigned AAA (SO) rating to the instrument. The rating was later withdrawn as the debentures were converted. Post-conversion, promoters' holding in the company declined to 55.97 per cent. WBIDC held roughly five per cent, while the remaining 39 per cent was with the public.

Subsequently, the Dhanukas stake in the company went up further to 57.03 per cent, as on June 30. Banks and financial institutions are holding 37.82 per cent, while the rest is held by the public.

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