Mumbai, April 4
WELSPUN India Ltd on Monday said it has allotted 90.79 lakh equity shares to Dunearn Investments (Mauritius) Pte Ltd, a wholly owned subsidiary of Temasek Holdings of Singapore at a price of Rs 130.25 per share, aggregating Rs 118.26 crore.
The company has also issued 16.81 lakh warrants to the Singapore firm, which will hold a 14 per cent stake in the company.
According to a notice issued to stock exchanges, the company has also allotted warrants to Welspun Wintex (7.73 lakh); Welspun Mercantile (8.40 lakh) and Welspun Trading (4.03 lakh) all three being group companies.
The warrants would carry the option to convert into equity shares at Rs 130.25 per share any time within 18 months from the date of allotment .
The funds would be utilised to part finance the company's growth and expand its weaving capacity and enhance its spindle facility. The funds would also go towards brand development and retail initiatives in India and global distribution alliances.
The above expansions will be financed partly through the issuance and the balance through debt at 2-3 per cent interest through TUF loans.
In this regard, Welspun Wintex was allotted 13.03 lakh equity shares and Welspun Mercantile 12.76 lakh equity shares on conversion of existing warrants allowed on May 14, 2004, at a face value of Rs 10 and at a premium of Rs 85.
According to a company official, post allotment, the conversion of all outstanding warrants as also the merger with Glofame Cotspin Industries Ltd, the paid-up capital of Welspun India would stand at Rs 76.79 crore. The promoters and associate companies would have a stake of 35.01 per cent and foreign institutional investors will hold 31.62 per cent.
The company has also inducted Mr Padmanabh Sinha as a nominee director representing Dunearn Investments (Mauritius) Pte Ltd, while Mr G. Diwan resigned as director from the board.
The board has also approved the purchase of 7.5 lakh shares of Welspun Zucchi Textiles Ltd (WZTL, a joint venture of the company) from the co-promoters of WZTL. It also announced that the company's Rs 575 crore expansion project at Anjar, Gujarat, for terry towels, bed sheets and cotton spinning is as per schedule.
In the terry towel unit, all 96 looms have started commercial production and the company claimed to have already shipped more than 1,000 tonnes to clients in the US. The sheeting and spinning units are expected to be operational during this month.