The Hindu Business Line : Pennar Steels mulls capital restructure

PENNAR Steels Ltd (PSL) has decided to restructure its capital and also go in for preferential offer to raise funds, in line with the scheme of reconstruction and arrangement sanctioned by the Andhra Pradesh High Court and the lending institutions — IDBI, ICICI and IFCI.

According to the scheme, the present equity capital of face value Rs 10 per share has to be reorganised as one equity share of Rs 5 each and one preference share of Rs 5 each.

Further, the company has to allot equity shares of Rs 5 each amounting to Rs 14.85 crore to the financial institutions by converting part of their debts. The company would also have to allot equity shares of Rs 5 each amounting to Rs 15 crore to the promoters.

Following the scheme of arrangement, PSL has decided to increase its authorised equity share capital to Rs 55 crore (11 crore shares of Rs 5 each), the company informed stock exchanges.

The PSL board at a meeting held on Thursday decided that it was necessary to raise additional resources to make payment to preference shareholders who have opted for the `Early Exit Option' under the corporate debt-restructuring scheme and also for additional financial resources required for the increased level of operations.

Accordingly, the company has decided to issue 1.6 crore warrants of Rs 5 each, convertible optionally into equivalent number of equity share of Rs 5 each at a premium of Rs 1.50 per share, on a preferential basis to the promoters, directors and/or their friends and relatives.

Out of these proposed warrants, 72.5 lakh warrants would be convertible, in one or more tranches, into equity shares of Rs 5 each at a premium of Rs 1.50 per share during the current financial year.

The balance of 87.5 lakh warrants of Rs 5 each would be convertible, in one or more tranches, into equity shares of Rs 5 each at a premium of Rs 1.50 per share during the next financial year.

The PSL board proposes to seek the consent of its shareholders for these proposals at its ensuing annual general meeting scheduled for August 16.

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