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GESCO to seek nod for pref issue

Our Bureau

NEW DELHI, Dec 6

GREAT Eastern Shipping Co Ltd (GESCO) proposes to issue Rs 100 crore worth of preference shares as part of its long-term plan to restructure the companys balance sheet by reducing its equity capital and creating a mezzanine capital by way of preference s hares.

The company has convened an EGM of its shareholders on December 14 to seek their approval for issuing and allotting 10 crore redeemable preference shares of Rs 10 each aggregating Rs 100 crore. The proceeds from the preference share issue will be utilise d for the long-term working capital requirement of the Compay, GESCO officials told Business Line.

The shareholders approval will give an enabling provision to the Company for issuing the preference shares, the exact details of which would be decided later by the board of GESCO.

The officials said that the preference shares would be issued either by way of private placement or preferential basis or any combination thereof to resident and/or non-residents including institutions, incorporated bodies, individuals or otherwise.

Following approval from the shareholders, the board of GESCO will decide on the terms relating to rate of dividend payable and the period of redemption, the officials said. For reducing its equity capital, the Company had resorted to buy-back of its equi ty. However, the proceeds from the issue of preference shares will not be used to fund the buy-back, the officials said..