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Eveready Industries India Ltd planned to raise Rs 100 crore to Rs 120 crore through institutional placement of equity this financial year. Amritanshu Khaitan, Managing Director of the company, said at press conference that half of the amount would be utilised for meeting working capital needs and the balance would primarily be used to retire high-cost long-term debt of around Rs 60 crore.
The company said on Friday that its Board has proposed an enabling provision before the shareholders to raise funds worth not more than Rs 150 crore through qualified institutional placement. The proposal would be discussed at the AGM on August 21. During 2014-15 financial year, it had reduced Rs 1 crore worth of finance cost.
“By the end of 2015-16, the company aims to bring down the annual interest cost to around Rs 15 crore from the current Rs 34 crore”, he explained.
Eveready’s long-term loan stands at Rs 85.76 crore. Eveready currently has a paid up capital of Rs 36.34 crore and the promoters (BM Khaitan Group) hold 43.92 per cent. The fresh fund mop up would add to the paid up capital as well as dilute the holdings of the promoters.
“We intend a restrict the total equity dilution to five per cent, which means the promoter holding in the enhanced paid up capital would decline by about 2 per cent,” he said.
Meanwhile, the company proposed an interim dividend of Rs 1 or 20 per cent for the current fiscal. The company even after reporting a net profit of Rs 49.03 crore in 2014-15 could not pay dividend as it had a carried forward loss of Rs 96.63 lakh from the past.
In the first quarter to June 30, 2015, the company reported a net profit of Rs 15.84 crore against the net profit of Rs 10.60 crore in the corresponding period of the previous fiscal.
During the first quarter, company’s turnover grew 8 per cent at Rs 348.16 crore. Though turnover of batteries showed small growth of 3 per cent and flashlight declined by 10 per cent, its lighting product sales led by LED items grew by 71 per cent. LED lighting products contributed Rs 22.34 crore (Rs 50 lakh) to the total turnover.
It has planned ramping up production of LED lights and has launched a new ad campaign.
“We would provide working capital to a selected dedicated LED light supplier. However, the quantum of support is to be fixed for the Hyderabad-based vendor”, Khaitan added.
The Rs 5 Eveready stock closed 3 per cent down at Rs 356.95 on the BSE.
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