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Lloyds Steel Industries Ltd board on Wednesday approved issue of shares on preferential basis to two non-promoter entities.
The company in a disclosure to the stock exchanges said a total of 38 crore shares has been proposed to be issued to Ultimate Logistics Solutions Private Ltd (31 crore shares) and Metallurgical Engineering and Equipments Ltd, erstwhile Siddharth Holding Pvt Ltd (seven crore shares).
The board has fixed July 14 for an EGM to seek shareholders’ nod on the proposal.
Regarding the premium for the issue, the company said the shares (face value Rs 10) “at a price of Rs 10 a share higher than the price calculated in accordance with Preferential Issue Guidelines” of SEBI. The proposed issue would change the shareholding pattern of the company.
Ultimate Logistics and Metallurgical Engineering currently hold 12.26 per cent each in the ailing company. As on March 30 this year, the promoter holding is shown at 36.14 per cent. Asset Reconstruction Co Ltd (ARCIL) and SBI hold 7.36 per cent and 7.56 per cent respectively.
Debt restructuring
The company earlier underwent debt restructuring and raised working capital through preferential issue. Under the terms of the restructuring of debts on a one-time settlement basis, the company issued shares to ARCIL on preferential basis against part conversion of their existing loan, of around Rs 50 crore. After this issue last year, the promoters holding in the company came down to 49.56 per cent from 53.29 per cent. The company also extended its financial year of 2010-2011 by a period of three months to June 30, 2011.
The company is mainly into manufacturing steel and capital equipments and turnkey projects. BIFR in 2006 declared the company as “sick” and appointed ICICI Bank as the operating agency.
On Wednesday, the shares of Llyods Steel closed five per cent higher at Rs 8.74 on the BSE.
>jayanta_mallick@thehindu.co.in
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