The Hindu Business Line : Orissa Sponge to make preferential allotments to Prakausali, TRFI

Kolkata, Sept. 14 The board of Orissa Sponge Iron & Steel on Friday proposed to allot 15 lakh equity shares on preferential basis to Prakausali Investments (India) P Ltd, a new promoter group entity. It also proposed to allot 15 lakh equity warrants on preferential basis to Prakausali.

In another proposal, it proposed to allot 30 lakh equity warrants on preferential basis to TRFI Investments Pvt Ltd, a promoter group outfit, which already owns 13.52 per cent stake in the current equity of Rs 14.5 crore. The proposals would be placed before shareholders for approval. The pricing of the issues would be done in accordance with the SEBI guidelines, the company said.

Promoters’ holding

The board on August 28, 2006, had decided to issue 14.1 lakh shares to Torsteel Research Foundation, another promoter group entity, on preferential basis against warrants allotted on May 31, 2006. After this, Torsteel’s holding was placed at 36.05 per cent and total promoter holding shot up to 62.81 per cent from 59.1 per cent as on March 31, 2001. Orissa Industrial Promotion & Investment Corporation (IPICOL), also a promoter, holds 12.3 per cent. However, the State agency’s holding has come down from 13.62 per cent as on March 31, 2006, as a result of fresh issues in the intervening period.

The company, which has operational base in Orissa and iron ore mines in Keonjhar and Sundargah districts, had reported a net loss of Rs 22.93 crore in the financial year ending March 31, 2007 against a net profit of Rs 1.85 crore in 2005-06 and around Rs 11 crore in 2004-05.

Carbon credit

In 2005-06, the management had accounted for carbon credit on an accrual basis on a conservative estimate of the net realisable value. However, there was no follow up in the last fiscal on this score.

Dr P.K. Mohanty, Vice-Chairman & MD, told Business Line recently that the company was facing serious infrastructure hurdles in the current rainy reason in its endeavour to return to profit. “The road to Paradip port is in horrible state, which is affecting our operations”, he added.

The stock, however, has been surging of late with consecutive hits to the upper circuits. In the last one month, it gained by 129 per cent. Today it closed at Rs 123.30 on the BSE, with a gain of 5 per cent.

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