The Hindu Business Line : Gayatri Sugars EGM okays pref offer

PAVING way for an early revival of Gayatri Sugars Ltd (GSL) shareholders have consented to the proposal for offering equity shares on a preferential allotment basis to promoters and financial institutions.

As a part of the restructuring scheme, the shareholders approved the proposal to issue 82.43-lakh equity shares of Rs 10 each at par to the promoters and their associates by conversion of unsecured loans and preference share application money brought in by them.

A resolution was also passed at the extraordinary general meeting on March 3 to issue 97.49 lakh equity shares of Rs 10 each at par to Industrial Development Bank of India (IDBI) and IFCI by converting part of their term loans and accrued interest. Meanwhile, the Corporate Debt Restructuring Cell at Mumbai has approved a package for the company. As a part of this, the financial institutions - IDBI and IFCI - have decided to convert 20 per cent of their term loan and overdue compound interest and liquidated damages into equity.

While IDBI decided to convert its term loan of Rs 5 crore, IFCI planned to convert Rs 2.58 crore of loan into equity. The overdue compound interest and liquidated damages of Rs 2.16 crore, comprising Rs 1.68 crore of IDBI and Rs 48.86 lakh of IFCI, were also decided to be converted into equity.

In view of this, the GSL board approved a resolution to allot 97,49,640 equity shares of Rs 10 each to IDBI and IFCI on preferential allotment basis. Of this, IDBI would get 66.8 lakh shares and IFCI 30.68 lakh shares.

As a part of the package, the institutions had also agreed to convert 13 per cent cumulative redeemable preference shares already held by them together with the accumulated dividend/interest into six per cent cumulative redeemable preference shares.

Taking this into consideration, the GSL board decided to issue 70.84 lakh preference shares in favour of IDBI and 24.52 lakh preference shares to IFCI.

The GSL board had informed the shareholders at the EGM that the institutions, term lending banks and working capital banks would charge the rate of interest at their respective prime lending rates and prime term lending rates from April 1, 2003 in terms of the restructuring scheme cleared by the CDR Cell.

Following the proposed allotment of shares in favour of promoters and institutions by way of converting debt into equity, the holding of promoters and their associates would come down to 62.79 per cent on the expanded equity base of Rs 42.99 crore from 75 per cent on the existing equity of Rs 25 crore. The holding of IDBI would increase to 20.18 per cent on the expanded equity from the current level of 7.98 per cent, while the holding of IFCI would also go up to 11.78 per cent from the existing 7.98 per cent.

More Stories on : Preferential Allotments | Sugar

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