The Hindu Business Line : Ashok Leyland plans to raise Rs 700 crore for capex

Ashok Leyland Ltd plans to raise about Rs 700 crore ($150 million) for capital expenditure. Company officials said this was only an enabling resolution and there was no immediate need for the funds.

In a communication to the stock exchanges on Thursday, Ashok Leyland said a committee of directors would look into all aspects of raising the funds, including the instrument and the time.

The company would seek its shareholders approval at the annual general meeting to increase the investment limit for foreign institutional investors (FIIs) from 24 per cent to 40 per cent. FIIs now hold about 15 per cent of the company's equity.

Ashok Leyland had raised $100 million in April 2004 through an issue of foreign currency convertible notes, for capital expenditure. About 85 per cent of the notes, including those subscribed to by the promoters, has been converted into equity.

While announcing the 2005-06 results, company officials told reporters that Ashok Leyland would spend Rs 550 crore in the next two years on increasing vehicle and aggregates capacity from 77,000 to 100,000 units, modernising the plants and on research and development. The company would also look at acquisitions in areas such as engineering design and components.

The company plans to sell 75,000 vehicles this financial year up from the 61,655 units it sold last year.

Ashok Leyland's shares closed at Rs 35.10 on the National Stock Exchange today, down from yesterday's closing price of Rs 36.30.

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