Bellary Steels To Raise Rs 180 Cr
Bellary Steels and Alloys (BSAL) has proposed to offer equity shares aggregating Rs 180 crore in a move to part-finance its upcoming integrated steel plant in Bellary.
The steel firm plans to offer 180 million equity shares of the face value of Rs 10 each, either at par or at premium, aggregating Rs 180 crore to the promoters, members, debenture holders, employees, financial institutions, non-resident Indians (NRIs), overseas corporate bodies (OCBs), foreign financial institutions (FIIs), companies, etc., through public issue, rights issue, private placement or on preferential allotment.
It has decided to move this as a special resolution at its upcoming annual general body meeting (AGM) to be held at Bellary on December 24. BSAL is setting up a Rs 891-crore integrated steel plant with a capacity of 0.5 million tonne per annum for manufacture of long products through blast furnace and basic oxygen furnace route.
It has also submitted an application to Industrial Development Bank of India (IDBI) for review of the project and for additional financial assistance both in terms of equity and debt. It expects to commence production of pig iron during the current fiscal.
In another move, BSAL has also decided to alter its authorised share capital by converting 70 crore redeemable preference shares into equity shares under section 94 of the Companies Act, 1956, to facilitate allotment of equity shares.
Bellary Steels' authorised capital is Rs 230 crore, comprising 80 million equity shares of Rs 10 each and 150 million redeemable preference shares of Rs 10 each. Its paid-up equity capital is Rs 22.99 crore and Rs 1.5 crore of preference shares.
According to BSAL, it had originally proposed to make private placement of preference shares of Rs 150 crore.
The firm has already received Rs 105 crore as share application money towards the equity capital. The company added the placement would take some time.
BSAL's performance during a period of 18 months has slipped, with net profit coming down from Rs 27.31 crore in 1996-97 to Rs 19.05 crore in the next 18 month period. This is despite its total income rising to Rs 514 crore from Rs 253.23 crore. The decrease in profit, inspite of better turnover, was mainly due to pressure on margins in recessionary conditions, it said.
Bellary Steels has recommended a dividend of 10 per cent for the period ended September 30, 1998.