Gujarat NRE Coke Board to meet on 17th Sep to consider Rights issue

Gujarat NRE Coke, the country's largest independent coke producer is currently riding the crest of a global price upsurge, which is being consistently reflected in its performance over the last few quarters. Coke price, which were hovering at around Rs. 6000 - 8000 in December 2006, has since gone up substantially in the range of Rs 30,000 - 35,000 in the current quarter. Moreover, China, which dominates the global market in the commodity and benchmarks its price around the world, is steadily moving towards a regime of curtailed supplies and tax controlled regime as evidenced by raising of the export duty on met coke from 25% to 40% in August this year, which has lead to a further supply crunch and consequent price rise.

In order to augment capital to partly meet Company’s financing plan for setting up a Greenfield 1 million TPA coke oven plant at Nellore District in the State of Andhra Pradesh, the Board of Directors would meet on 17th September 2008, to consider inter alia issue of Equity shares with Differential Voting Rights (DVR Shares) to the existing shareholders on a Rights basis in the ratio of 1 DVR Share per 300 existing equity shares at the price of Rs 1000/- per share (i.e. share of face value of Rs 10/- each at a premium of Rs 990/- per share) carrying higher voting rights while pari pasu in all other respects to the existing equity capital of the company.

The company has already mooted a bonus issue in the ratio of 2 : 5 which is expected to be passed by the shareholders at the AGM next week and may be issued thereafter sometime towards the end of October by the Board. The AGM is also expected to declare an enhanced dividend of 25 %, which would be paid soon thereafter.

The Company is the only Indian company owning and operating coking coal mines in Australia and both its mines are now in production with expected production of more than a million tonnes in the current fiscal and development of these two mines is in progress to take the production beyond 7 million tonnes per annum by 2012/13. Hard coking coal prices are also rising very rapidly and as against Contracted rates of USD 300, the spot prices are currently ruling at USD 400.