Financial Daily from THE HINDU group of publications
Tuesday, Mar 21, 2006
Financial Daily from THE HINDU group of publications Tuesday, Mar 21, 2006 |
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Corporate
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Announcements Industry & Economy - Automobile Components LGB plans to raise Rs 200 cr R.Y. Narayanan
Coimbatore , March 20 The Coimbatore-based auto component manufacturer L.G. Balakrishnan & Bros (LGB) has planned to raise Rs 200 crore to fund its expansion and to retire high cost debt. An Issue Management Committee (IMC) consisting of the Managing Director, Mr B. Vijayakumar, the Joint Managing Director, Mr P.S. Balasubramanian and Director Mr S. Sivakumar, would meet on Thursday to decide as to how to structure the issue. (In a notification to the NSE, LGB said the company's board of directors gave the approval to raise up to Rs 250 crore through an issue of equity/equity linked (securities) by way of a rights issue/preferential allotment and/ or a debt instrument.) Speaking to Business Line, Mr Vijayakumar said of the proposed Rs 200 crore, Rs 60-Rs 80 crore would be used to repay high-cost short-term debt. The rest of the money (Rs 120 crore-Rs 130 crore) will be utilised for capital expenditure in the next three years. On the mode of raising the required funds, he said the company proposed to raise around Rs 60 crore by way of long-term debt. Another Rs 20 crore would be raised through a preferential offerto a financial institution. The company would come out with a rights issue of optional convertible debentures of Rs 100 crore, whose ratio and pricing would be decided on Thursday. He said the company had initiated steps to build a forging plant in Coimbatore and land acquisition has been completed. The orders for machinery have been placed. Since the existing chain factory of LGB was working at 100 per cent capacity, it wanted to establish two new chain manufacturing units — one at Pune and another most probably at Uttaranchal.
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