Aditya Birla Nuvo plans rights issue

Aditya Birla group company Aditya Birla Nuvo today approved a rights issue in the ratio of 2:17. This means each shareholder of the company holding 17 shares will be allotted two rights shares.

The company, in its committee meeting today, decided to offer 98,26,638 equity shares of Rs 10 each for subscription under the ensuing rights issue in the ratio of two equity shares for every 17 equity shares held on the record date at Rs 793 per share. December 8 has been fixed as the record date for the rights issue.

Earlier this week, the company had said it would make Birla NGK Insulators Pvt Ltd (Birla NGK) its subsidiary. Birla NGK is a 50:50 joint venture between Aditya Birla Nuvo and Japan-based NGK Insulators for the insulator business.

The company and its wholly-owned subsidiary have plans to purchase all the equity shares held by NGK and its affiliate, Mitsubishi Corporation, in Birla NGK.

The company, along with its subsidiary, has entered into a share-purchase agreement with its joint venture partner, pursuant to which all the equity shares held by NGK and Mitsubishi in Birla NGK will be purchased in two stages.

On completion of the transaction, Birla NGK will cease to be a joint venture company and will become a subsidiary of Aditya Birla Nuvo.

For the quarter ended September 2006, Aditya Birla Nuvo reported 39.23 per cent rise in net profit at Rs 53.73 crore from Rs 38.59 crore in the corresponding quarter of the last financial year. The company's earnings per share on the trailing twelve-month basis is Rs 23.01.