The Hindu Business Line : Omax puts off rights plan, opts for pref offer

The tough market conditions faced by the auto ancillary units which have impacted their stock price, seems to have forced Omax Autos Ltd (OAL) to choose the option of a preferential offer instead of taking the further issue/rights issue route to mobilise resources.

The company had earlier informed the stock exchanges that a meeting of the board of directors of the company will be held on September 1, to explore the possibility for the issue of convertible warrants / further issue of equity shares on preferential basis to mutual funds / FIs / FIIs / promoters, and / or to consider the rights issue to the existing shareholders of the company. The meeting, however, was adjourned and was held the following day (on September 2) to continue the discussion and consider a preferential issue of warrants, in view of the deferment of the further issue of equity shares as contemplated earlier.

The company has now informed the BSE and NSE that the board of directors has decided to make a preferential issue of 25 lakh warrants at a rate of Rs 83 per warrant, each convertible into 1 equity share of the company of Rs 10 each to the following entities — Asia Pacific Capital India Pvt Ltd, (12.5 lakh warrants) and Gala Finance and Investments Ltd (12.5 lakh warrants). The decision is subject to the approval of shareholders.

The price of Rs 83 for the above preferential issue is calculated as per the SEBI Guidelines for Preferential Allotment of Shares, the company has said.

In its communication to the stock exchanges, the company said that the board of directors decided that “in view of the present market scenario the board deferred the matter of further issue of shares of the company”. The 24th annual general meeting of the company which was earlier scheduled to take place on September 3, has been rescheduled to September 28.

The preferential offer price of Rs 83 per warrant including share face value of Rs 10 each is at a premium to the current market price of the share. The stock closed at Rs 66.40 on the BSE on Monday.

The promoters hold 52.14 per cent of the equity capital of Rs 21.3 crore of OAL. Omax produces components for two wheelers and four wheelers, including sheet metal, tubular, machined components, painting & plating parts.