Megastar Foods plans to raise Rs 42 cr through preferential issue of shares

Food processing firm Megastar Foods Ltd plans to raise Rs 42.38 crore through the issue of preferential shares to pre-pay debt and meet future requirements of funds.

The company's board approved to create, issue, offer and allot up to 13 lakh shares of Rs 10 each on a preferential basis to the promoters/non-promoters/public category shareholders of the company, according to a regulatory filing on Thursday.

The company would seek the approval of the shareholders at the extra ordinary general meeting.

"The proceeds of the preferential issue will be utilised for prepayment of borrowings of the company, meeting future funding requirements, working capital and other general corporate purposes of the company," the filing said.

The equity shares under this preferential issue would be made at an issue price of Rs 326 per equity share. The company intends to raise Rs 42.38 crore through this issue. Megastar Foods has a wheat processing plant in Punjab. Its turnover stood at Rs 304.40 crore in the previous year.