Century Enka Gets Nod To Hike Borrowing Limit
Shareholders of the Rs 725-crore B K Birla group company Century Enka Ltd passed all the resolutions tabled at the company's annual general meeting held here yesterday.
One of the resolutions was regarding the company's plan to enhance the borrowing limit to Rs 300 crore to augment its long-term resources for working capital requirements. The other resolution was with regard to the management's plan to secure debentures or loans up to an amount aggregating Rs 300 crore over and above the paid-up capital and free reserves of the company for business purposes.
In the wake of the amalgamation of Rajashree Polyfil Ltd with Century Enka, the company had issued 67,50,000 equity shares of Rs 10 each and allotted the shares to the erstwhile Rajashree Polyfil shareholders' on May 4, 1998, in the ratio of one equity share of the company for every twenty equity shares of Rajashree Polyfil Ltd.
As per the agreement entered into between Century Enka and Akzo Nobel NV - by which the latter holds less than 40 per cent of the equity shares - and the agreement relating to the know-how, technical assistance and patent licence, the overseas firm can appoint one nominee on the board of the company as special director.
Following the amalgamation which necessitated issuance of equity shares to the shareholders of erstwhile Rajashree Polyfil, the issued capital of Century Enka had increased. Though one of the subsidiary of Akzo Nobel held shares in Rajashree Polyfil, the holding of Akzo Nobel in the company still remained below 40 per cent.
In order to retain the existing arrangement for appointment of one nominee director as special director on the board of Akzo Nobel, the management is planning to reduce the present share holding of 40 per cent by Akzo Nobel to 35 per cent. Shareholders' approval will be sought at the forthcoming AGM for the same.
Meanwhile, the management of Century Enka is in negotiations with its Pune employees and labour department, government of Maharashtra, for a long-term wage settlement to avoid an occurrence of 24 hours illegal strike without notice on April 23, 1998. During the year under review, the management sub-divided equity share of Rs 100 each into 10 equity shares of Rs 10 each.
The company registered a net profit of Rs 1.01 crore on an equity share capital of Rs 30.01 crore in the first quarter of the current financial year 1998-99. Sales earning stood at Rs 165.77 crore during the period under review.
On the company's future profitability, chairman B K Birla said that much of it depends on the current import duty and the government of India's policy in the near future.