Electrolux Kelvinator Ltd (EKL), the Indian subsidiary of Swedish consumer electronics major AB Electrolux, is planning to hit the market with a Rs 250 crore rights issue, partly to retire debts and finance its capital expenditure projects.
"The issue at par is expected to come in another couple of months and will be in the ratio of ten shares for every seven held," Ashok Barat, business controller, EKL, said in Kolkata on Friday. He further added that company expect to get the approval from the Foreign Investment Promotion Board (FIPB) for the issue.
EKL has debt Rs 360 crore as on June 30, 2002. The servicing cost is about Rs 40 crore in interest outgo. The proceeds from the issue will be mainly deployed to repay the debts.
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Moreover, it will require about Rs 30 crore to upgrade all their three existing refrigerator plants and make them CFC free. EKL needs to invest this as manufacture of CFC refrigerator will be banned from January 1, 2003, under Montreal Protocol.
Barat said the rights issue was planned such that in case of non-subscription of any part, the promoters of Electrolux, already holding 76 per cent of the total equity, will subscribe fully to the unsubscribed portion.
Commenting on financial performance, Barat said during the last fiscal ended December, 2001 their turnover stood at Rs 460 crore and for current year they were targeting a turnover of over Rs 600 crore. "A host of new products would be launched to further increase our market share from 27 per cent at present in the household products," Barat said.
Company will lay special emphasis on the washing machine segment where it presently holds only 5 per cent market share. EKL today launched a new range of front load Washy Talky washing machine. It hopes to corner 10-15 per cent market by 2003. At present, the company is working has two brands, Electrolux and Electrolux Kelvinator, in India.