The Hindu Business Line : McNally Bharat's FCCB issue scheduled for Sept

Growth plans
McNally Bharat hopes to raise $10 million
Co raised $7 m using FCCB in Aug. 2005
All bond-holders of the earlier issue have converted holdings into equity
Issue to be listed at the Luxemborg Stock Exchange

Kolkata , Aug. 23

McNally Bharat's next round of FCCB (foreign currency convertible bonds) issue in the market is scheduled for September this year.

McNally Bharat Engineering Co Ltd is a 45-year-old joint venture between the city-based business families of BM Khaitan and CK Birla.

The company is hoping to raise approximately $10 million through the FCCB route. In the last one year, this is the second round of FCCBs from McNally Bharat. In August 2005, it raised $7 million using the same instrument.

Subsequently, all the bond-holders have converted their holdings into equity.

This money, along with the funds likely to be raised next month, would be utilised for the company's expansion projects.

The London-based Elara Capital has been appointed as the merchant banker and the issue would be listed at the Luxemborg Stock Exchange.

Q1 results

In the first quarter of 2006-07, McNally Bharat registered net sales of Rs 109.19 crore. Profit before tax was Rs 4.01 crore and profit after tax was Rs 3.49 crore. For the year ended March 31, 2006, McNally Bharat's net sales jumped 18 per cent to Rs 334.71 crore, up from the Rs 284.70 crore in the previous year. Profit before tax increased by 91 per cent to Rs 6.6 crore. Net profit increased to Rs 5.25 crore (Rs 2.62 crore).

Meanwhile, both promoters have made a fresh investment of around Rs 24 crore through issue of warrants.

They have bought 14.7 lakh shares at a price of Rs 143 per share. Issue of fresh shares was completed on June 30 this year.

The company's business is two-fold. First, in projects and also manufacturing of material handling and mineral processing equipment and pumps, thickeners and floatation cells. It has two plants at Kumardhubi in Jharkhand and at Bangalore.

The company is planning to foray into production of industrial gear-boxes in technical and financial collaboration with a foreign player. Talks are on with three parties but nothing has been finalised yet, sources point out.

In the projects business, the company is banking heavily on the capacity expansion of the steel companies. Technical tie-ups have been completed for supply of sinter plants, coke oven batteries and blast furnaces.

Currently, McNally Bharat has an order book of Rs 800 crore to be executed in the next 18 months.

At the Bangalore factory, it is planning to set up a facility for manufacturing airport baggage handling equipment.

More Stories on : Overseas Borrowings | Engineering

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page