Hindustan Copper to raise Rs 1,700 cr via FPO

The public sector copper producer Hindustan Copper (HCL) today said it will come out with a follow-on public offer (FPO) to raise Rs 1,700 crore by diluting 10 per cent stake for part-funding its expansion plans.

"The money raised through the FPO would be about half of our Rs 3,500-crore expansion plan," HCL Chairman and Managing Director Shakeel Ahmed said here today.

"We need the money for our capex for which we have proposed the FPO," Ahmed told the media on the sidelines of of a CII event here today.

Currently, the government owns about 99 per cent equity in the company. However, it could not be immediately ascertained whether the disvestment process would be through a additional equity dilution by the government or the company would issue fresh shares or it could be a mix of both.

On the BSE, the company counter closed 2.22 per cent up at Rs 260.40 today.

Meanwhile, Ahmed also said after suffering losses last year, the company is expecting a net profit of over Rs 100 crore in the current fiscal. "Last year, our profitability had impacted due to the global financial meltdown. We suffered badly due to the commodity slowdown which had hit copper prices particularly,"

"This year we are expecting a profit of more than Rs 100 crore, despite a wage revision impact of Rs 70 crore," he said.

The Central PSU had suffered a net loss of Rs 10.3 crore in 2008-09.