Electrex India In Capital Rejig Plan

Bangalore-based power tools manufacturer Electrex (India) Ltd has embarked on a finance restructuring move to reduce its equity share capital and increase the preference share capital of the company.

Electrex has proposed to reduce the equity share capital from Rs 25 crore to Rs 20 crore and increase the preference share capital from Rs 25 crore to Rs 30 crore.

The company's total authorised share capital is Rs 50 crore.

Also, the company has proposed to issue and allot five lakh cumulative non-convertible preference shares of the face value of Rs 100 each of an aggregate amount not exceeding Rs five crore.

 

Electrex plans to seek the approval of its shareholders for the issue of preference shares soon.

However, the company clarified that the proposed issue of preference shares will be only for private placement through some financial institutions.

To meet the requirement of funds because of the growing needs of the company's business, Electrex had only last year decided to increase the authorised share capital of the company from Rs 40 crore to Rs 50 crore.

In view of its frequent recourse to a higher debt than equity route, Electrex was considering a `financial restructuring' of the company. As a result, it had decided to go for equity route in the last year.

However, the company added that it had postponed plans of going for any public issue. "We decided against it because of bad market conditions," an official said.

The company had last year signed a MoU with the Japanese Fuji Heavy Industries Ltd (FHI), the makers of Subaru cars and Robin generators, for establishing a new company Electrex Robin Industries Ltd to manufacture and market Robin generators and engines in India.

Electrex had also entered into another collaboration with Hitachi group for forming a new company Hitachi Koki Co. Ltd.

For the year concluded, Electrex has achieved a sales turnover of Rs 75.30 crore against Rs 53.23 crore achieved a year before, registering a growth of 41 per cent. Its profit after tax has also increased from Rs 6.07 crore to Rs 8 crore this year, 31 per cent rise.

The company had invested Rs 47 crore in its expansion-cum-diversification project. The expansion had enlarged the manufacturing capacity from 60,000 to 1,20,000 tools a year.

With the new modern plant, Electrex hopes to target foreign markets for power tools.