EGM okays preferential issue for promoters to have majority stake

Ispat Industries promoters were planning to increase their stake to 51 per cent over the next year, said Anil Sureka, director.

Sureka was speaking on the sidelines of the company's extraordinary general meeting to approve issue and allotment of equity warrants on a preferential basis to the promoters. Each warrant has been priced at Rs 43.89 and the total consideration works out to Rs 509 crore.

Post-issue, promoters' stake in the company would stand at 47.43 per cent from the current 42.44 per cent. However, it is not known the instrument that the company would use to increase promoters' holding to 51 per cent.

Holder of warrants would have an option to be allotted one equity share of the company for each warrant held, any time after the date of allotment but on or before the expiry of 18 months from the date of allotment.

The funds being raised would be utilised to part finance various new projects and backward integration, namely capacity expansion of existing hot rolled coil plant from three million tonnes to 3.6 million tonnes, coke oven and pellet plants.