Goldstone Tech okays GDR float

The board of Goldstone Technologies on Wednesday decided to go for a GDR (global depository receipt) issue and raise funds up to $5 million.

The company will convene a extraordinary general meeting (EGM) on February 11 to obtain the approval of the shareholders for the proposed issue.

"We will seek shareholders' consent at the EGM for passing an enabling resolution to raise funds upto $15 million through the GDR issue. The issue is expected to be completed by March 2004," J A Rao, director (finance) of Goldstone said, indicating that the company might opt for Luxemburg stock exchange listing.

The issue proceeds will be utilised to repay the Rs 7 crore outstanding debt owed by the company to IDBI and the rest of funds will be used to finance capital expenditure and long term working capital requirements.

"Most of the overseas investors are reluctant to subscribe to preferential issues because of the one year lock-in period stipulation by Sebi. The GDR will eliminate this roadblock since there is no lock-in period applicable for these securities," Rao explained the rationale for their decision.

The board, which met today, allotted 10 lakh equity warrants in terms of the special resolution passed by the shareholders in their meeting held on September 30, 2003.

J A Rao was allotted four lakh warrants while three other senior employees were allotted 1.5 lakh warrants each. The issue price for these warrants, which are convertible into one equity share each within a period of eighteen months, will be the ruling share price on the stock exchanges on January 10,2004.