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Kohinoor Mandal

Kolkata , June 24

THE Rs 8,460-crore RPG group may dilute its stake, currently over 50 per cent, in Phillips Carbon Black Ltd to raise $50 million or Rs 225 crore during the next 18-24 months to meet capital expenditure requirements.

The management has already proposed an enabling resolution for the purpose at its next board meeting scheduled for June 27.Sources said that the company's initial fund requirement is for its 30-MW power project adjoining the carbon black plant at Durgapur in West Bengal. The cost of the proposed power plant is Rs 120 crore.

"We have prepared an enabling resolution. The purpose is to raise money as and when necessary. We might raise funds for other capital expenditure projects, too, but nothing has been finalised," the sources said.

However, fresh capacity addition of carbon black is ruled out for the time being. The company is India's largest carbon black producer with an annual capacity of 2.7 lakh tonnes per annum.

According to the enabling resolution, the company might either go in for fresh equity offering, preferential issue, rights issue, debentures or preference shares. Foreign listing or a foreign currency convertible bond is contemplated.

Sources said the modus operandi for the fund raising exercise would be finalised within the next three to six months. "At present, we are studying all the options to find out which is most suitable for us," sources said.

When asked whether the Goenkas, who currently hold a 52.6 per cent stake in the company, would dilute their stake, sources said that this was not ruled out. "In fact, this is one area where we need to firm up our plan. If the promoters wish to keep their stake intact, fresh equity could be issued too," sources said.

The proposed power plant at Durgapur will be the second power unit of Phillips Carbon Black, the first being located next to its Baroda unit. The capacity of this unit is 12 MW and it has a power purchase agreement with Adani Power Trading Corporation.

The Durgapur unit is expected to be installed during the next two years but the company is yet to finalise a power trading agreement for the unit.

Meanwhile, it is learnt that the board meeting on June 27 will finalise the company's accounts for the last 18 months ended March 31, 2005. Phillips Carbon Black has decided to shift its accounting year from October-September to April-March.

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