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Seshasayee Paper to acquire 100% equity in Subburaj Papers

T E Narasimhan  |  Chennai 

BSE-listed Seshasayee Paper and Boards Ltd (SPB), along with its group company Ponni Sugars (Erode) Ltd, is planning to acquire Subburaj Papers Ltd (SPL), located in south Tamil Nadu.

The equity acquisition is estimated to be around Rs 30 crore, while total investment, including proposed expansion, would be about Rs 250 crore.

Company officials indicated SPB would need to buy the entire equity from the Subburaj Group at a fair value of Rs 20 per equity share of Rs 10, involving Rs 30 crore. At present, SPB's annual capacity of 115,000 tonnes is fully utilised.

The new paper mill would bring in a ready capacity of 60,000 tonnes per annum that could be enhanced to 90,000 tonnes with marginal investment.

Tirunelveli-based Subburaj Papers had set up the paper mill two years before, based on fibre. The group decided to exit from paper and approached SPB for outright divestment.

SPB plans to operate the acquired outfit as a separate corporate entity for the present and would decide on a merger at anappropriate time, the company said.

First Published: Mon, June 27 2011. 00:44 IST