Ashok Leyland to raise $150 m for capex

Ashok Leyland, the flagship company of the Hinduja group plans to raise $150 million (Rs 675 crore) so as to fund its capacity expansion during the current financial year.

The second largest vehicle maker has informed the stock exchange that the board of directors at their meeting held on Thursday have approved to raise up to $150 million in one or more tranches.

The company would raise the funds through foreign currency convertible bonds or notes (FCCB/FCCN), global depository receipts (GDRs) or private placement basis, to fund the capital expenditure of the company.

N Sridharan, executive director-finance, Ashok Leyland told Business Standard that the capital would be raised to fund its capacity expansion from 77,000 vehicles to 1 lakh vehicles and other design engineering projects.

When asked when the company would decide the route on raising the funds, he said that it will be done prior to the company's annual general body meeting (AGM) to be held on August 1, 2006.

The items considered during the board meeting was to increase in the ceiling for FII investment in the equity share capital of the company from 24 per cent to 40 per cent, subject to the approval of the shareholders.

A committee of directors has been formed to deal with all aspects arising out of the issue of raising the funds including the timing of the offering, the form of securities.

The details will involve the class of investors to whom the securities are to be offered or allotted, the issue price, premium at which the shares would be issued on conversion of the securities, terms of redemption of the securities, rate of interest, redemption period, dividend entitlement.

Listing of these securities in one or more stock exchanges of India or abroad and to appoint investment bankers who will manage the issue, legal advisors and auditors to complete the due diligence process and file the necessary documents with the appropriate authorities will also be considered by the committee.

Further, approval of the shareholders will be sought on the above proposals at the ensuing AGM to be held on August 01,2006.