The Hindu Business Line : Shree Renuka Sugars to raise $40-50 m thru ECB

In an effort to build a kitty for its future expansion programme, Shree Renuka Sugars Ltd is planning an ECB (external commercial borrowing) of $40-50 million.

The promoters are also contemplating equity dilution either through a GDR (global depository receipt) or a public issue or private placement for raising funds for that kitty.

According to a senior company official, Shree Renuka Sugars has already mandated Dutch banking major, ABN Amro, for the ECB.

Regarding equity dilution, the official said, the promoters have not yet decided on the amount of holding that would be reduced. As a result he could not specify the amount of money that could be raised through this route.

"A final decision on both these matters would be taken by the end of the current quarter. May be in July this year a formal announcement will be made by us," the official said.

At present, the promoters are holding approximately 50 per cent in the company. According to the official, the funds that would be raised through ECB and GDR would exclusively be used for future growth plans, which may include acquisitions too.

Performance

For the quarter ended March 31, the company recorded a total income of Rs 236.91 crore against Rs 210.84 crore in the corresponding quarter of the previous year. Net profit increased by 207 per cent to Rs 45.50 crore from Rs 14.81 crore.

For the half year period ended March 31, total income was Rs 442.45 crore against Rs 284.07 crore in the corresponding last half year. Net profit was Rs 66.30 crore.

The board of directors also approved the recent acquisition of a power plant worth Rs 39.72 crore and addition of 60 and 150 KLPD (kilo litre per day) distillery capacity in Maharashtra and Karnataka.

The cost of the distillery expansion programme is Rs 50 crore.

An additional cogeneration capacity of 15 MW in Karnataka at a cost of Rs 30 crore is also approved.

These projects will take Shree Renuka Sugars' total distillery capacity to 450 KLPD and cogeneration capacity to 103.5 MW by the next season.

The directors have also agreed to increase the FII's holding limit to 49 per cent. As on December 31, 2005, the foreign shareholding in the company was 10.18 per cent.

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