The Hindu Business Line : MTR Foods to allot equity to Magnus Cap

The issue is likely to be about four lakh equity shares of Rs 10 each. The ready-to-eat foods company has, however, denied that it is mulling an initial public offer anytime soon.

"Magnus Capital had invested in our company along with other investors in 1999 and, as per the shareholder agreement, they were entitled to a specific number of warrants to be converted into equity shares. Magnus has now decided to exercise these warrants," Mr P. Sadananda Maiya, Chairman and Managing Director of MTR Foods, told Business Line.

Mr Maiya said Magnus invested about Rs 6 crore in the company by subscribing to 15 lakh shares at Rs 40 each in 2000 and it had the option of buying another 32 lakh shares subsequently. MTR's proposal is awaiting approval by the Foreign Investment Promotion Board.

On whether the move was connected to the company's plans to get listed on the Indian bourses, Mr Maiya said, "We are not going in for an IPO, not before 2006 at least. Our expansion will be funded through internal accruals."

He said the company, which was eyeing a turnover of about Rs 150 crore this fiscal, hoped to become a Rs 500-crore company within five years.

When asked whether the equity share allotment was part of a larger plan to induct a strategic partner, Mr Maiya declined to comment.

Currently, the Indian promoters hold around 36 per cent equity in the company with Magnus and JP Morgan Chase believed to be the two major overseas investors in MTR Foods.

MTR Foods is considered among the top five processed food manufacturers in India.

It manufactures and exports a wide range of packaged foods to countries including the US, the UK, Australia, New Zealand, Malaysia, Singapore, UAE and Oman.

Its product range includes ready-to-eat curries, rice and gravies, frozen foods, ice-cream, instant snack and dessert mixes, spices and a variety of accompaniments such as pickles and papads.

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