Gujarat NRE pays $17.5 mn for FCCBs conversion

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Gujarat NRE Coke, the country's largest private met coke producer, today said it has paid $17.4 million for the conversion of its 174 zero coupon unsecured foreign currency convertible bonds (FCCB) to the bond holders.

The FCCBs were of $1,00,000 value each and were part of 600 FCCBs issued in 2006 by the company, aggregating to $60 million, it said in a statement.

"Consequently, this FCCB issue has been fully converted by the bond holders," it said.

"We have always delivered phenomenal returns to our long term investors and such full conversion of our FCCBs reflect immense confidence of foreign investors in our company," Gujarat NRE Chairman Arun Kumar Jagatramka said.

Of the 600 FCCBs, the company had already paid the conversion price for 324 FCCBs in past and today's transaction of 174 completes the payment schedule, a company spokesperson said.

Some time back, the company had successfully paid the conversion price of its previous issue of 2,200 FCCBs, issued at $25,000 each in 2005 and aggregating $55 million to its bond holders in past, the statement said.

FCCBs have been one of the favoured tools for raising funds from foreign markets for Indian companies and many firms like Gujarat NRE had used this instrument in 2005-06 to fund their expansion plans.

According to a Gujarat NRE spokesperson, the payment will not impact the balance sheet of the company as sufficient provisions have already been made for the payment.

About the ongoing expansion of company's facilities, Gujarat NRE Chairman Jagatramka said, "We are increasing our met coke production capacity from current 1.38 million tonne per annum to around 4 million tonne per annum by 2014-15."

He further said that the company is aiming "to become one of the top 10 hard coking coal producers in the world", adding that the company has also undertaken extensive exercise to increase its coking coal production from its Australian mine to 6 million tonne per annum by 2014-15 from current level of 1.5 million tonne per annum.

The company owns and operates a coking coal mine in Australia, having around 625 million tonne of coking coal resources with excellent coking properties, the statement said.

Met coke is used by the integrated steel plants, industry and foundries producing Ferro Alloys, Pig Iron, Engineering Goods, Chemicals, Soda Ash and Zinc units etc, while coking coal is another vital steel making raw material.

Shares of the company closed at Rs 53.90 apiece on the Bombay Stock Exchange, up 0.28% from the previous close.