BUSINESS

Jayshree Chem's rights issue to fund expansion

Special Correspondent

MUMBAI: S. K. Bangur group company Jayshree Chemicals has announced a rights issue of 2.40 crore equity shares of Rs.10 each for cash at a premium of Rs.5 per equity share in the ratio of 9 equity shares for every 2 equity shares held, aggregating to Rs.36 crore.

Closes on March 18

The issue has already opened and closes on March 18. The issue is to part finance the company's Rs.150 crore modernisation-cum-expansion of its plant in the Ganjam district of Orissa.

The expansion plan envisages introduction of membrane cell technology by replacing the existing mercury cell technology and raising production capacity of caustic soda from 65 tonnes to 152 tonnes a day. The company has entered into a memorandum of understanding with Uhde India Private Ltd, a wholly owned subsidiary of Uhde of Germany, for providing the entire engineering services, supply of membrane cell elements, total implementation and commissioning of the membrane based cell technology.

Besides the rights issue, the funding will come by a debt component of Rs.90 crore and the balance by internal accruals and excise credit available to the company. The entire debt has already been sanctioned by a consortium of banks led by State Bank of India and disbursement has already commenced.

Jayshree Chemicals is the only caustic soda manufacturer in Orissa where major caustic soda consumers like Nalco, Hindalco and Vedanta Aluminium are located. As a result, the company enjoys the benefit of lower freight in its supplies to these manufacturing units.