The Hindu Business Line : Phillips Carbon may opt for pvt placement to FIIs

PHILLIPS Carbon Black Ltd (PCBL), an RPG Group company, may drop its earlier plan of a foreign currency convertible bonds (FCCB) issue and opt for a private placement to one or two foreign institutional investors.

According to sources in the company, discussions are still going on the selection of the instrument, but the programme of raising Rs 35-40 crore in foreign currency has not been dropped.

PCBL, the largest carbon black manufacturer in the country and the ninth largest in the world, is setting up a power plant of 30 MW adjacent to its plant at Durgapur in West Bengal at a cost of Rs 110 crore.

While Rs 35-40 crore will be raised as equity for the project, rest of funds are likely to raised as debt.

"At present, the market is slightly down. So, we have slightly deferred the whole programme and have also started renegotiating with the investors. We hope to finalise the details shortly," sources said.

It was also learnt that private placement might be made to one or two investors. Sources confirmed that both these organisations are foreign institutional investors. "It may so happen that we may make the private placement to one investor only," sources said.

When asked about the price the company was seeking for the private placement, sources preferred not to comment. However, officials of some of the leading merchant bankers felt that PCBL was probably asking for a 20-25 per cent premium over and above the price being quoted in the Indian bourses.

However, sources confirmed that the funds would be raised only in foreign currency and would be approximately $8-10 million.

It may be noted that the Kolkata-based R.P. Goenka Group currently holds more than 52 per cent in PCBL.

At the last annual general meeting of the shareholders, the company had passed an enabling resolution to raise equity to the extent of $50 million.

PCBL's existing annual capacity of 2.7 lakh tonnes and the proposed power plant at Durgapur will be its second power unit. The first is 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.

At the BSE, on Wednesday, the PCBL scrip opened at price of Rs 86.55, reached a high of Rs 87.10 and finally closed at Rs 85.30.

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