JK Paper okays rights issue, Q1 net dips 16%

JK Paper today said its board had approved to raise Rs 246 crore through a rights issue to part-fund its expansion at its unit at Rayagada in Orissa.

The company's board, which met today, has decided to issue 5.86 crore shares of face value of Rs 10 each at a premium of Rs 42 each aggregating to Rs 246 crore, JK Paper said in a filing to the Bombay Stock Exchange (BSE).

The company plans to issue shares to the shareholders in the ratio of three equity shares for every four equity shares held on the record date, it added.

The rights issue will open on August 8, 2011 and close on August 23, 2011, it said adding that the issue price is 4.2 times the face value of the equity shares of the company.

In a separate filing to the BSE, the company today said its net profit declined by 16.66% to Rs 24.26 crore for the first quarter ended June 30, 2011, compared to same period previous fiscal.

The company had a net profit of Rs 29.11 crore in the same period previous fiscal.

The company's net sales rose to Rs 323.39 crore for the first quarter ended June 30, compared to Rs 290.52 crore in the same period last fiscal.

The company said profitability in the first quarter was affected due to high raw material costs and adverse movement of currencies.

JK Paper has taken up expansion project to increase the total installed capacity from 2,40,000 tonne per annum (TOA) to 3,90,000 TPA at its unit at Rayagada in Orissa.

The capex will be funded through Rs 150 crore of internal accruals, Rs 250 crore of rights issue, Rs 225 crore of FCCB issue and Rs 1,050 crore of debt.

JK Paper is one of the leading producers of office paper, coated paper and high-end packaging board paper in the country.

Shares of JK Paper today closed at Rs 48.65 on the BSE, up 1.99% from previous close.