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Our Bureau

For repayment of existing debt, general corporate purposes

Mumbai , Sept. 11

Aditya Birla Nuvo Ltd will raise up to Rs 780 crore through issue of equity shares on a rights basis, its board decided on Monday.

The share ratio and price per share for the rights issue would be decided and announced later by the board, said a statement to the stock exchanges.

The funds raised through the issue would be utilised for repayment of existing debt and general corporate purposes.

"It may be recalled that the company has made substantial investments in Idea Cellular, TransWorks and Birla Sun Life Insurance besides for its ongoing capital expenditure.

The proposed capital issue will strengthen the capital structure of the company," said the statement.

Aditya Birla Nuvo was earlier Indian Rayon & Industries Ltd into which were merged Indo Gulf Fertiliser and Birla Global Finance.

Acquisitions

The company has interests in viscose filament yarn, garments, carbon black, telecom, BPO and insurance and has recently made a lot of investment in acquisitions and expansion.

It acquired a Canada-based BPO company for $125 million (Rs 575 crore) a couple of months ago. The group already has two pulp mills in Canada and has a joint venture with Sun Life, Canada, in financial services. Before that, Aditya Birla Nuvo had acquired 15 per cent stake in Idea Cellular for Rs 1,373 crore, when the AV Birla Group acquired 48.12 per cent stake in that company from the Tatas for Rs 4,406 crore.

"Aditya Birla Nuvo stands at the threshold of its next phase of growth," said a statement quoting Mr Kumar Mangalam Birla, Chairman.

"The proposed rights offering will improve the gearing on the balance sheet, besides providing another opportunity to the existing shareholders to participate in the company," said Mr Sanjeev Aga, Managing Director. Enam Financial Consultants and DSP Merrill Lynch Ltd have been appointed as managers to the proposed issue and Amarchand & Mangaldas & Suresh A Shroff & Co as legal advisors to the company.

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