Financial Daily from THE HINDU group of publications
Tuesday, Apr 18, 2006
Financial Daily from THE HINDU group of publications Tuesday, Apr 18, 2006 |
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Corporate
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Overseas Borrowings Goldman Sachs invests $17 m in JK Paper Our Bureau
Expansion drive JK Paper achieves financial closure Equity raising programme to conclude GDR issue to reduce debt to equity ratio
New Delhi , April 17 Goldman Sachs has invested $17 million (around Rs 76 crore) in JK Paper Ltd through its investment arm in Mauritius. This follows JK Paper's recently concluded $12 million GDR issue and $5 million unsecured foreign currency convertible bond (FCCB) issue, which have been entirely subscribed to by the US-based investment banking firm. The FCCBs and GDRs have been listed on the Luxembourg Stock Exchange. According to a company release, 7.7 million GDRs were placed at a price of Rs 69 per share, representing a premium of 16 per cent over the BSE closing price on the date of issue. The FCCBs with a coupon of 1.25 per cent, due in 2011, have a conversion price of Rs 95 per share, representing a premium of 60 per cent over the BSE closing price. Funds from the proposed issue would be used to part finance the 60,000-tonne per annum multiplayer packaging board project commissioned at the company's central paper mill unit in Gujarat. The project, which requires an investment of Rs 235 crore, would commence production by the first quarter of 2007. The company would also use part of the proceeds for its oxygen de-lignification project, modernisation and systems upgradation programmes.
Financial closure
Following the issue, JK Paper has achieved financial closure for its ongoing expansion and modernisation plan. The GDR issue, the company stated, would result in a lowering of the debt to equity ratio. Earlier, the company had raised around Rs 100 crore through issue of shares to the World Bank's private arm, International Finance Corporation (IFC), and Fenner India Ltd. The company raised Rs 99.97 crore through preferential issue of equity shares amounting to Rs 50 crore each to IFC and Fenner (India) Ltd, a promoter group, at Rs 65 per share. Mr Harsh Pati Singhania, Managing Director, JK Paper , said: "After IFC Washington's investment at Rs 65 per share, we are pleased to add another quality investor like Goldman Sachs as a partner in our growth. "JK Paper will be concluding its equity-raising programme with this investment".
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