Woolworth Pref Mop-Up At Rs 6 Cr

Woolworth (India) Ltd (WIL), a part of the Uniworth group of companies, has raised Rs 6 crore through 13 per cent non-convertible cumulative redeem-able preference shares by way of private placement with the Industrial Development of India (IDBI).

Woolworth, which is a 100 per cent export-oriented unit produces worsted, polywool and silk yarn, has two manufacturing units at Raipur in Madhya Pradesh and at Nagpur in Maharashtra.

WIL, which commissioned its wool top plant at Nagpur during the year, hopes to complete the expansion-cum-diversification plan at both the units by December 1998.

WIL has addressed the long drawn case of share allotment during 1997-98. The company had kept in abeyance the allotment of 2,268 shares against a rights issue since 1994. It has now allotted these at a premium of Rs 50 per share which will be entitled for a pro rata dividend for the year under review.

The company's expansion drive at the ongoing projects is being funded primarily by the $20-million external commercial borrowings raised through the State Bank of India, London. Woolworth has also converted a substantial portion of its INR loans to foreign currency loans.

The company thinks the recession in Japan and south Asia will affect its global operations during the year. Apart from the domestic market, it will focus more on penetrating the Latin American countries and the US markets.

The company's total income rose to Rs 300.89 crore for the year ended March 31, 1998, from the previous year's Rs 272.82 crore. The net profit slumped to Rs 6.20 crore from the previous year's Rs 26.03 crore. Its interest payout rose to Rs 29.33 crore in 1997-98.

WIL has signed an agreement with the National Securities Depository Ltd (NSDL) to facilitate the holdings and trading of the company's equity shares in electronic form. Dematerialisation of the company's shares is expected to begin soon. Earlier, Crisil had downgraded the ratings on the company's Rs 20.25-crore non-convertible debenture (NCD) programme from A 1 to BB, indicating inadequate safety.

The revised rating reflects the rating agency's concerns regarding the company's sustained weakening financial risk profile, the continued slowdown in the worsted yarn industry, the impact of the recent downturn in some of the Asian economies on the company's performance and Woolworth's increasing exposure to its associate companies.