Boliden Contech AB of Sweden is set to pick up 5.31 per cent equity in the copper project of Swil Ltd, which is being set up with a capacity of 50,000 tonnes per annum of copper cathode.
The Swedish company is pumping in Rs 9 crore into the project by subscribing to an issue of fully-convertible debentures by Swil, for which the Foreign Investment Promotion Board has given its go-ahead.
The Swedish company is also the technical collaborator for the project, being set up in Jhagadia Industrial Estate, Bharuch, Gujarat. Swil completed an issue of 65,56,568 fully convertible debentures carrying a rate of 15 per cent at Rs 90 each, aggregating to about Rs 59 crore in May 1996. It proposes to come out with a balance issue of rights of fully-convertible debentures of Rs 62.41 crore and an FCD public issue of Rs 53 crore in the third quarter of 1998. The board of directors of Swil has approved the proposed rights issue as well as the public issue. The FCDs will be compulsorily converted into equity shares of Rs 10 each within 17 months from the date of allotment.
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As a result of the proposed rights and public issues of FCDs, Swil's equity capital will expand to about 84.5 crore from about Rs 27.04 crore at present.
The foreign equity holding in the venture will increase from 3.1 per cent in the current total equity capital to 7.5 per cent in the expanded equity, with 5.31 per cent held by Boliden Contech. The proposal was earlier deferred by the FIPB. The administrative ministry, the ministry of mines, supported the proposal after obtaining details of the equity from the company.
The resolution of the Swil board supporting the proposal was furnished along with the proposal.