Hinduja Foundries plans to withdraw rights issue

The company was planning to raise Rs 125 cr through the issue

Hinduja Foundries Ltd, the foundry arm of Hinduja group, has decided to withdraw its proposed rights issue. The company was planning to raise around Rs 124.98 crore through the issue.

Meanwhile, the company's Board has given nod to raise upto Rs 300 crore through private placement and/or preferential basis.

When asked B Swaminathan, managing director (Executive), Hinduja Foundries, refused to speak.

Meanwhile company's announcement to Bombay Stock Exchange stated that the Board of Directors of the Company at its meeting held on May 15, 2012 gave nod for withdrawal of the proposed rights.

The company was planning to issue of 1,66,63,812 equity shares of Rs 10 each for cash at a price of Rs 75 per share (including a premium of Rs 65) aggregating to Rs 124.98 crore on rights basis in the ratio of 29:50.

The company stated that “due to current volatile market conditions vis-a-vis the current market price of the company's shares quoted at the bourses and in the opinion of the Board, the options are very limited to ensure complete subscription of the issue".

Earlier, the company has said it was planning to raise the money to support it's investment of Rs 70 crore this fiscal at its new facility in Sriperumbudur and to modernise its Ennore facility.

Company's today announcement further stated that the board has given nod to issue of redeemable, non-convertible, cumulative preference share.

“...issue/offer, allot and deliver in one or more tranches on a private placement and / or preferential basis not exceeding 3,00,00,000, (3 crore) 9% Redeemable, Non Convertible, Cumulative Preference Shares of Rs 100 each of an aggregate nominal amount not exceeding Rs 300 crore in the aggregate out of the authorised capital of the Company to the promoters of the Company subject to necessary provisions and approvals,” said in the announcement.

The company's stock price was trading at Rs 50.75 a share at Bombay Stock Exchange on Thursday.

The company is planning to convene an Extra-Ordinary General Meeting of the Shareholders of the Company on July 04, 2012 at Chennai in this regard.