Orient Paper Hikes Share Capital By Rs 75 Crore

The G P-C K Birla controlled Orient Paper & Industries has increased its authorised share capital by Rs 75 crore to Rs 100 crore. Currently, the company's authorised share capital stands at Rs 25 crore.

With the enhancement of its authorised share capital and the subsequent change in the articles of association, the company's authorised share capital would be Rs 100 crore divided into 2.5 crore ordinary shares of Rs 10 each, 25 lakh preference shares of Rs 100 each and five crore unclassified shares of Rs 10 each. A special resolution to this effect was adopted on April 25.

 

For the financial year ended March 31, 1998, Orient Paper & Industries incurred a loss of Rs 14.39 crore due to the interest burden which increased from Rs 24.43 crore in the previous fiscal to nearly Rs 36.91 crore. Depreciation too rose from Rs 13.29 crore in 1996-97 to Rs 17.18 crore.

As a result of the net loss, the company's reserves decreased to Rs 154 crore during the year under review against Rs 170 crore. Net sales too dipped. In 1996-97, sales revenue which stood at Rs 568.99 crore decreased to Rs 538.14 crore.

The paper industry is cyclical in nature resulting in sharp fluctuation in paper prices.

According to a recent survey, international prices of paper too fell from $1,200 per tonne in June 1995 to $675-750 per tonne in March 1997. The drop in the international prices of paper was mainly due to the lower pulp prices and an increase in the supply of pulp from Indonesia and destocking of paper by consumers worldwide.

However, pulp prices started improving in mid-1997-98 followed by the firming up of global paper prices. However, the south-east Asia financial crisis has dampened the international price of many commodities including paper.