The Hindu Business Line : Usha Martin's $25-m GDR issue approved

AT an extraordinary general meeting of the company held here today, shareholders of Usha Martin Ltd approved the issue of GDRs/FCCBs of up to $25 million (Rs 110 crore) along with a green shoe option of 20 per cent and a preferential issue of convertible warrants to the promoters of the company.

The GDRs/FCCBs shall be listed on the Luxembourg Stock Exchange.

A total of 58 lakh convertible warrants will be issued to several parties belonging to the promoters' group and their associates.

Each warrant will be priced at Rs 153 for each share of the face value of Rs 5.

The proposed allottees have agreed to subscribe to the warrants at the stated price by paying 10 per cent of the price upfront and can exercise their option of converting the warrants into equity shares by making payment of the balance 90 per cent of the consideration.

The equity shares allotted shall be subject to a lock-in period of three years from the date of issue of the warrants.

After the EGM, Mr Rajeev Jhawar, Managing Director of the company, told presspersons that the proceeds from the issue - estimated to be around Rs 220 crore - would go towards financing the company's capital expenditure plan that would entail an investment of Rs 462 crore.

The balance funds required for the purpose would be generated from internal accruals.

The company's capital expenditure plan includes expansion of its steel making capacity from 3,20,000 tonnes per annum at present to 5,00,000 tonnes per annum, iron ore and coal mining and increasing the company's wire and wire rope capacity from 1,75,000 tonnes per annum to 2,50,000 tonnes per annum.

Mr Jhawar said that, post-issue, the promoters' holding in Usha Martin would go up from 46.1 per cent at present to 46.8 per cent.

According to him, the company had initiated discussions with Joh Pengg of Austria for setting up a joint venture for manufacturing valve and clutch wires.

The proposed facility was likely to be set up in Jharkhand at an estimated investment of $ 5-7 million.

Modalities in this regard would be discussed with representatives of the Austrian company who are scheduled to visit India shortly.

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