Japanese home appliance major Panasonic Corporation would increase its stake in the India subsidiary — Panasonic Home Appliances India Company Ltd — by infusing Rs 19.58 crore along with Apollo Infrastructure Projects Finance Company.
In a communication to the shareholders, BSE-listed Panasonic Home Appliances said the company had been expanding its production capacity of normal cooker (lid cooker) for the past two years to cater to both domestic and international markets. In the recent past, it had also introduced new products like mechanical jar cooker and new models of lid cooker and mixer grinder.
In the long-term, the company wants to concentrate on manufacturing. As a part of this, it is exploring the feasibility of introducing new products.
The capex incurred for development of new products, funded mainly through long term loans from banks, had increased the interest burden. "With a view to reducing the long term debt and interest cost, it is proposed to pre-pay the high-cost long-term debts. This will help the company improve the profitablity. After considering various options, it is felt that increasing the paid-up capital by further issue of shares would be a viable option to raise funds," said the company.
It was further said promoters were willing to contribute towards the equity capital and had offered to subscribed further shares. The board has approved the proposal to issue up to 15,67,000 equity shares of Rs 10 each to the promoters for cash at a price of Rs 125 a share (including premium of Rs 115) on a preferential basis.
The company is planning to allot 12,62,000 shares to Panasonic Corporation and 3,05,000 shares to Apollo Infrastructure Project Finance Company Pvt Ltd.
Post the allotment, Panasonic Corporation's holding will increase to 55.56 per cent from the current 50.99 per cent and Apollo Infrastructure's will be 3.01 per cent.
Panasonic Corporation has implemented a new group organisation structure with effect with January 2012. Following this, the company's will be renamed as Panasonic Appliances India Company Ltd.