The Hindu Business Line : German co to pick up 9.5 pc stake in Jindal Poly

THE Germany-based DEG Deutche Investitutions has finalised plans to pick up 9.5 per cent equity stake in Jindal Poly Films Ltd (JPFL) along with a board position.

The German financial institution would pick up 13 lakh shares with face value of Rs 10 each at a premium of Rs 350 per share amounting to Rs 47 crore.

The fund will be utilised for JPFL's Rs 348-crore greenfield expansion plans.

The company is also in the process of borrowing another Rs 50 crore from the Commerce Bank of Germany.

It plans to undertake a Rs 500-crore expansion over the next 2-3 years, said Mr S.K. Mittal, Managing Director.

However, the exact funding pattern for expansion has not been finalised.

The various options being considered by the company include a public or rights issue or a foreign float along with a substantial borrowing component tentatively from the German bank, which has been the company's main foreign funding agency so far, Mr Mittal said.

The company is also banking heavily on the export market apart from its current focus on the domestic market, where it has recorded annual growth rate of around 20 per cent over the past few years.

During the past three years, the company has been able to reduce average cost of funds from 12 per cent to 4.5 per cent.

The company hopes to end the current fiscal with a gross turnover of more than Rs 800 crore, Mr Mittal said.

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