The promoters of the Rs 956 crore Arvind Mills Ltd have increased their holding to 21.07 per cent in the company by acquiring 2,11,89,758 equity shares of the total equity capital from the earlier 20 per cent.
The company, in a statement, has said that the promoters and persons acting in concert with them now hold 21.07 per cent of the equity capital of Rs 150 crore. The company has since moved a resolution to increase the equity capital to Rs 260 crore to meet future requirements.
In another move, the company has also proposed to issue 50 lakh preference shares of Rs 100 each, aggregating Rs 50 crore, to meet the working capital and capital expenditures.
According to the company, this has been necessitated in view of its expansion plans, and also for general corporate purposes including capital expenditure, working capital requirements and strategic investments.
The proposal also calls for increasing the capital of the company from Rs 150 crore divided into 11 crore equity shares of Rs 10 each and 40 lakh preference shares of Rs 100 each to Rs 260 crore divided into 11 crore equity shares of Rs 10 each, 90 lakh preference shares of Rs 100 each and six crore of unclassified shares of Rs 10 each respectively.
According to industry data, during the last fiscal, Arvind Mills' denim sales accounted for 61 per cent of the turnover while exports accounted for 44 per cent.
The company's key business has been adversely hit in both the local and export markets due to the Asian crisis and slowdown in domestic demand.
The branded garment business contributed to 16 per cent of turnover, and the company derives a sizeable income from its treasury operations.
During FY98, the company implemented its 40 million meters per annum rope denim project at Santej in Ahmedabad. Other projects at the same location comprising expansion of the cotton shirting facility, a new knit fabric unit and captive plants are at advanced stages of completion.
The outlay for these projects is estimated to be Rs 1000 crore, and most of it is being funded through debt.
During FY98, 38,50,000 redeemable cumulative preference shares, aggregating Rs 38.50 crore, were allotted on private placement basis, mainly to institutional investors. The company has also issued floating rate notes (FRNs) of $125 million in the overseas market.
