IFC to pick up 12.5% in Cosmos Films

International Finance Corporation (IFC), Washington, will pick up a 12.5 per cent stake in Cosmo Films for around Rs 18.5 crore. The board announced this in its meeting held today.

The company will allot 2.6 million shares to IFC, the private sector lending arm of the World Bank, at Rs 75 a share, including a premium of Rs 65. The sale would be on preferential basis and is subject to the approval of the shareholders at the next extraordinary general meeting.

"The capital infusion would be used for working capital requirements as well as long term funding. It will be used for the upcoming export oriented unit being set up in Aurangabad as well as for new metalisers," S K Mittal, executive director, said.

The export unit will be desgined to produce value-added products to be sold at a better margin, he said.

Cosmo manufactures bi-axially oriented poly-propylene films used for packaging and this is the second time that the company is sourcing capital from IFC.

"We had taken a $10 million loan about two years back from IFC and are paying it back now. With a satisfactory debt repayment record, IFC showed interest in buying our shares," Mittal said.

Cosmo Films has a paid-up capital of Rs 17 crore and had a turnover of Rs 313.30 crore in 2003-04. In the first half of this year, it had a turnover of Rs 193.60 crore with net profit of Rs 5.58 crore.