Financial Daily from THE HINDU group of publications
Tuesday, Aug 31, 2004
Financial Daily from THE HINDU group of publications Tuesday, Aug 31, 2004 |
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Corporate
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Preferential Allotments Tuticorin Alkali to issue preference shares to SPIC — To increase authorised share capital Our Bureau
Chennai , Aug. 30 TUTICORIN Alkali Chemicals and Fertilisers Ltd plans to issue 20 lakh five per cent redeemable cumulative preference shares of Rs 100 each at par to Southern Petrochemical Industries Corporation Ltd (SPIC) totalling Rs 20 crore on private placement basis by converting a part of the loan given by SPIC to the company. Tuticorin Alkali Chemicals (TAC) will seek its shareholders' approval for this proposal at the extraordinary general meeting scheduled for September 24. As promoters of the company, SPIC had extended unsecured loans from time to time. The total outstanding loan as on September 30, 2003 including interest was Rs 30.47 crore. According to a notice issued by TAC to the shareholders on the EGM, in the last four years, the company's performance had been affected by multiple factors such as depressed soda ash market conditions, difficulty in marketing of ammonium chloride (fertiliser grade) due to failure of monsoon and the unprecedented increase in price of imported ammonia. To improve its financial position, TAC had approached financial institutions and banks. While sanctioning the financial restructuring package, Industrial Development Bank of India had laid down a condition that a portion of the promoter's loan should be converted into preference shares. A consortium of banks, which had extended working capital facility, had also insisted on this. According to the notice, the redeemable cumulative preference shares are redeemable not later than 20 years from the date of allotment. Dividend on these shares is payable at the time of redemption or at the time of declaring dividend on equity shares, whichever is earlier. SPIC holds 46.93 per cent of the Rs 14.26 crore equity capital of Tuticorin Alkali Chemicals. The preference capital of the company is Rs 4 crore. For the quarter ended June 30, TAC reported a loss of Rs 5.73 crore on net sales of Rs 25.57 crore. At the EGM, TAC will also seek the shareholders' approval to increase the authorised share capital of the company from Rs 35 crore - made up of 1.90 crore equity shares of Rs 10 each and 16 lakh redeemable cumulative preference shares of Rs 100 each - to Rs 39 crore, by creating eight lakh new redeemable cumulative preference shares of Rs 100 each and cancelling 40 lakh equity shares of Rs 10 each, which form part of the authorised share capital of the company but have not been subscribed to by anybody. Thus if the proposal is approved, the company will have 1.5 crore equity shares of Rs 10 each and 24 lakh preference shares of Rs 100 each.
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