The Hindu Business Line : McLeod Russel to raise up to $30 m through QIP

In the next two months McLeod Russel Ltd, belonging to the Kolkata-based B.M. Khaitan Group, will be raising up to $30 million through the Qualified Institutions Placement (QIP) mode.

According to Mr K.K. Baheti, Director, the company has already sought shareholders' permission on this issue through the postal ballot. The last date for receiving the shareholders' approval is October 15.

"We would like to complete the QIP issue within one month from the final date of receiving the shareholders' approval", Mr Baheti told Business Line. A substantial portion of this money would be used to reduce the company's debt.

As on March 31, 2006, McLeod Russel had a total debt of Rs 476.96 crore.

The company has decided to retire Rs 200 crore worth of debt in the current financial year, 2006-07.

"Out of Rs 200 crore, about Rs 50 crore would come from internal generations, Rs 30 crore from dilution of the promoters' stake held in the treasury stock and around Rs 100-125 crore from the QIP issue", he said.

McLeod Russel has neither finalised the merchant banker for the issue nor has it decided on the price of the QIPs. Earlier, it was considering raising the same amount through a GDR (global depository receipt) but it has replaced it with the QIP.

Last week, the promoters had sold 27 lakh shares to a FII at a price of Rs 123.50. According to Mr Baheti, the promoters got 2.97 lakh shares following the acquisition and subsequently the merger of Borelli Tea Holdings Ltd, UK.

"At present, this is the last such exercise of equity dilution by the promoters by selling the treasury stock," he said.

For the year ended March 31, 2006, the company recorded a turnover of Rs 567.48 crore and profit before tax of Rs 33.35 crore. Profit after tax was Rs 22.92 crore.

"The current year's operations are extremely good. After several years, the industry is witnessing an appreciation of the tea prices by almost Rs 10 per kilogram. This would help us in boosting our bottomline", he said.

On Monday, the McLeod Russel scrip at the BSE registered a 2.2 per cent appreciation and ended at Rs 127.85. More than 2.39 lakh shares were traded.

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