Balaji Foods In Authorised Cap Expansion Plans

The loss-making Balaji Foods and Feeds, a Venkateshware Hatecheries (VH) group company, plans to increase its authorised share capital and sell or lease its commercial layer farm.

The capital raised through equity hike and sale of farm will be utilised to pay dues to institutions and banks.

The move is expected to reduce its interest burden. The company plans to increase its authorised share capital to Rs 35 crore from the present Rs 30 crore through the private placement route.

Balaji will put the proposals for the shareholders' approval at its forthcoming annual general meeting (AGM) scheduled at Secunderabad to be held on September 25.

 

The farm situated at Hyderabad meets a substantial part of the company's requirements for its egg powder division.

At present the company's authorised share capital is Rs 30 crore consisting of 2.50 crore equity shares of Rs 10 each aggregating to Rs 25 crore and five lakh preference shares of Rs 100 each aggregating to Rs five crore.

The subscribed share capital of the company stands at Rs 24.71 crore.

In the financial year 1997-98, Balaji Foods and Feeds posted a net loss of Rs 10.32 crore as against a marginal net profit of Rs 10.01 lakh in the previous year.

The company's egg powder production has been badly hit by the cheap egg powder being sold in the global market by Thailand and other countries whose currencies have depreciated sharply. This has made the company's egg powder uncompetitive in the global market.

Besides, Syria and Turkey are reported to have entered the world market in a big way, particularly in west Asia and CIS countries, supplying large-size eggs at low prices.

Balaji's egg powder production in the financial year 1997-98 was 2,311 tonne as against 2,832 tonne in the previous year, while sales were lower at 1,580 tonne as compared with 2,788 tonne sold in the previous year.

The price realisation, too, dropped resulting in lower turnover.

Total turnover of the company in fiscal 1997-98 dropped to Rs 34.06 crore from Rs 53.82 crore in the previous year. Interest cost worked out to be Rs 4.16 crore (Rs 4.35 crore).