Rainbow Papers GDR offer fully subscribed

Raises $27 million to aid Rs 327 cr expansion program

The GDR offering of Ahmedabad based Rainbow Papers Ltd. closed on 27th January, 2010 and the allotment of 10235455 underlying Equity Shares was made in their Board Meeting on 28th January, 2010 (1 GDR = 1 Equity Share). The company has raised $27million to part-finance its ongoing Rs 327 crore expansion program. The GDR would be listed at Luxembourg Stock Exchange and was priced at US $ 2.64 (Rs. 121/- per GDR).  The closing share price of Rainbow Papers Ltd on 27th January, 2010 was Rs.108/- per share which reflects that shares are issued at a premium of around 10% per share. Rainbow Papers Ltd. is engaged in the business of manufacturing paper and paper products.

The proceeds of the offer will be used for capacity expansion and installation of thermal power plant. Rainbow Papers Ltd. aims to increase the manufacturing capacity to 3,05,000 TPA. After the expansion, the power generation capacity would increase to 45 MW after an addition of 30 MW during this expansion. The power generated by the new power plant will be partly used for running the capacity additions and partly will be available for merchant sale.

The GDR offer marks the financial closure for the expansion program as Rainbow Papers has already tied up with banks for a loan of approximately Rs. 200 crores. And balance through internal accruals.

Mr. Ajay Goenka, Chairman and Managing Director, Rainbow Papers commented that “the proposed expansion would make Rainbow Papers Ltd. among the leading manufacturers of paper products in India. This would reinforce our position in the existing segments and allow us to enter several other categories which offer better margins and are essentially import-substitution products. After the expansion, we would perhaps be the most self-sufficient players. We would continue to be most eco friendly paper manufacturers.”

Ashika Capital Ltd and Headway Capital Advisors Ltd are the advisors to Rainbow Papers Ltd for their GDR transaction.

About Rainbow Papers:
Rainbow Papers Ltd, is a BSE listed (BSE Code: 523523) Ahmedabad-based Company engaged in the business of manufacturing of paper and paper products.  The company is accredited with ISO 9001, 14001 & OHSAS 18001.