Emco planning preferential issue

Emco, the transformer and meter company in which Reliance-owned BSES Infrastructure has picked up a minority stake, is planning a preferential issue and a private placement of warrants.

The company said in a notice to the Bombay Stock Exchange that its board had taken this decision on February 7.

The company has decided "to issue on private placement and/ or preferential basis 2,70,000 warrants, each warrant carrying two options / entitlement (Part A & Part B) to subscribe to one number of equity share against each option on a future date (that is, in aggregate options to subscribe for 5,40,000 equity shares of the company)".

The power arm of the Reliance group BSES recently picked up a 8.21 per cent stake in the company through its subsidiary, BSES Infrastructure.

BSES has described this as a routine investment based on the good prospects of the sector. The Electricity Act 2003 has given a major fillip to the power sector.

Further, transformer companies have received a shot in the arm owing to the accelerated power development and research programme launched by the Union ministry of power. Under this programme, the focus is on revamping and upgrading transmission & distribution systems.

The company is expected to be a major beneficiary as it primarily operates in this segment. The board has also decided to make a second call of Rs.26 on the holders of 9,00,000 equity shares of Rs 10 each. The board has fixed March 31, 2004, as the late date for paying this amount.