Magma weighs dilution of promoter pie

Magma Leasing Ltd (MLL) is considering the possibility of offering a portion of the promoters 72 per cent stake in favour of multilateral agencies - a domestic financial institution and a foreign institutional investor (FII).

"We have forwarded a proposal to raise $10 million from multilateral agencies through a combination of equity and debt. They are yet to take a decision on the combination of debt and equity and the process of equity dilution "" preferential or right will also have to be decided upon," explained, Sanjay Chamria, managing director, MLL. Last year Netherlands based, FMO had provided £5 million debt to the company.

When asked to what extent the promoters were willing to divest their stake, Chamria said, "The promoters of the company are open to divesting a portion their stake in favour of the agencies with board representation. For management stake from multilateral agencies would help in improving the functioning of the company which in turn would mean better return." "We expect to finalise our decision in the next couple of months," he added.

Meanwhile, the company has targeted a Rs 800 crore disbursal for 2003-04 and has already clocked a Rs 577 crore figure for the nine month ended period and has registered a 62 per cent growth over the previous corresponding period.

Total income on the other hand recorded a 35 per cent rise to Rs 44.61 crore while its net profit increased 217 per cent to Rs 18.96 crore against 5.98 crore.