The Hindu Business Line : Morepen Lab to raise authorised capital

Kolkata May 1 Morepen Laboratories Ltd, which is going through a corporate debt restructuring, has initiated the process of bringing in new investments through a combination of equity and other convertible securities. The infusion of fresh investment will require an increase in the company's authorised capital.

The company, which will soon seek shareholders' approval on the matter, has proposed an enabling resolution to issue equity/preference shares and convertible securities by way of an offering to promoters, banks or other investors.

The idea is to raise funds needed for repayment and settlement of outstanding dues of banks and FD holders, a notice issued to shareholders has mentioned.

The company has proposed to increase its authorised share capital to Rs 205 crore from Rs 85 crore. It plans to create additional 15 crore shares of Rs 2 each and 90 lakh preference shares of Rs 100 each. This will result in an amendment of its memorandum of understanding, which will now feature an authorised capital of Rs 205 crore, divided into 45 crore equity shares and 1.15 crore preference shares.

The plan is also to issue up to 2,19,90,000 equity shares of Rs 2 each, up to 7,36,50,000 warrants convertible into equity shares of Rs 2 each and up to 89,14,397 optionally convertible preference shares (OCPS). The relevant date for the purpose of determining the applicable price for the issue of equity shares and warrants has been set at April 4, 2007.

Warrant holders will exercise their rights on the warrants within 18 months for conversion into equity shares, and the holders of OCPS will exercise their rights at the end of 7 years (for conversion into equity shares).

On Monday, the Rs 2-face value Morepen Labs stock closed at Rs 16.05 on the NSE after opening at Rs 15.90. Over 2.2 lakh shares made up the traded quantity. The stock's 52-week high and low are Rs 26 and Rs 6.50 respectively.

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