DFPCL plans to raise Rs 1,000 cr for expansion, diversification

Deepak Fertilisers has sought approval of its shareholders for raising Rs 1,000 crore from the market during the current financial year 2014-15 for its expansion and diversification.

The Pune-based company, which is listed as Deepak Fertilisers & Petrochemicals Corporation Ltd (DFPCL), has also moved a proposal to double the borrowing powers of its board to Rs 1,000 crore.

It may use these funds to finance its plans for doubling complex fertiliser capacity to six million tonnes per annum.

As of now a two-way fight is on for the takeover of MCFL between Deepak Fertilisers which presently has 25.31% stake in the company and has made an open offer to buy an additional 26% at Rs 63 per share, totalling Rs 194 crore.

Meanwhile, Saroj Poddar-led Zuari group has teamed up with UB Group, the original promoters of MCFL, in its offer to buy a 26% stake for Rs 68.55 a share, for a total of Rs 211.22 crore in MCFL.

"DFPCL is poised to embark upon expansion/diversification of its businesses in view of increase in the demand for the company's existing products and the potential business opportunities in related products," the proposal added.

The company in the proposal has also said that by this resolution and with the power to delegate such authority to any person(s) to offer or invite subscriptions for unsecured/ secured redeemable non-convertible bonds/debentures, in one or more series/tranches, aggregating up to Rs 1,000 crore on private placement.

In another proposal, DFPCL has proposed that it is felt that in view of the proposed expansion/diversification plans of the Company, the Company may need to borrow in excess of the aforesaid limit.

"It is therefore proposed to authorise the Board of Directors to borrow an amount not exceeding Rs 1,000 crore (Rupees One Thousand Crore only) over and above the aggregate of the paid-up capital and free reserves of the Company," the proposal added.

The company has incorporated these resolutions in its annual report for 2013-14 and both proposals will be taken up at its annual general meeting (AGM) on July 31.