Trinetra Cement Ltd, formerly known as Indo Zinc Ltd, has decided to defer its rights issue plan due to the “adverse market conditions”. The company has now decided to raise around Rs 200 crore through preferential allotment.
It may be noted that two years ago, Indo Zinc was acquired by ICL Financial Services Ltd, the wholly-owned subsidiary of The India Cements Ltd, one of the biggest cement manufacturers in the country. The proposed fund raising is for acquiring lands for mining and future expansion of Trinetra’s plant.
In its 2011-12 annual report, the company said it had decided to defer the proposed rights issue in view of the adverse market conditions.
In April 2011, the company had filed a draft letter of offer with Sebi in which it stated it was planning to raise Rs 179.02 crore through a rights issue.
On Wednesday, the company got the nod of its shareholders for the proposed preferential allotment at the company's annual general meeting in Chennai.
In an explanatory note to shareholders, the company said: "It proposes to offer, issue and allot preference shares for an amount not exceeding Rs 200 crore to various persons and / or entities including promoters and / or promoter group companies and / or their associates, on private placement / preferential basis.”
The company further stated that its 1.5 million tonne per annum cement plant commissioned its project at Banswara, Rajasthan, in January 2011, which has stabilised in stages and has crossed the 1 million tonne mark in its first full year of its operations 2011 - 12. Further, the company's 20 Mw thermal captive power plant was commissioned during February 2012.
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To rationalise the cost of coal, the company has started using alternative fuels like pet coke.
The clinker production was at 780,000 tonnes (279,000 tonnes in the previous year) while the cement grinding was a little over 1 million tonnes (324,000 tonnes last year) and sales of just over 1 million tonnes as opposed to 316,000 tonnes in the previous year.
The performance could have been better but for the infrastructure bottlenecks during the period of monsoon which resulted in lesser evacuation of materials, the company said in the annual report.
The company is now in the process of acquiring lands for mining and for the plant to take care of its future expansions and incur additional cost in acquiring machinery / equipment for improving efficiencies.