Bajaj Hindusthan plans rights issue to retire debt

The country's largest sugar maker Bajaj Hindusthan is planning to launch a rights issue to raise Rs 1,820 crore for part repayment of debts.

The company had last week filed the Draft Letter of Offer for Rights Issue with market regulator Securities and Exchange Board of India (Sebi) to raise Rs 1,820 crore, of which Rs 1,720 crore would be utilised for retiring its debts.

"We propose to utilise Rs 1,720 crore out of the net proceeds of the issue for the repayment/pre-payment, in full or in part, of the outstanding loans," the draft letter of offer of the company said.

The company said it has availed loan of Rs 3,997.49 crore from various banks and financial institutions as on March 31, this year. The amount outstanding under these facilities is Rs 3,651 crore.

Bajaj Hindusthan, which has 14 sugar plants in Uttar Pradesh with a daily cane crushing capacity of 1.36 lakh tonnes, has taken loan of Rs 200 crore each from Central Bank, Oriental Bank of Commerce, Canara Bank, Bank of Baroda, Bank of India among others.

Last month, the company had informed the Bombay Stock Exchange (BSE) that equity shares on rights basis would be issued to the existing shareholders for an issue size not exceeding Rs 2,000 crore.

The company's share closed at Rs 66.90 on BSE last week.

Its net profit rose to Rs 72.82 crore during the quarter ended March 31 on a standalone basis from Rs 31.79 crore in the same period of last year. Its net sales increased to Rs 1,252 crore from Rs 567.4 crore in the review period.

"As of March 31, 2011, our company's total indebtedness was Rs 5,876.71 crore, which included working capital loans," the company said.

Bajaj Hindusthan has also forayed into power business. It is setting up five new coal-based power plants in Uttar Pradesh with total power generation capacity of 450 MW at a cost of Rs 2,300 crore.

That apart, BHL through a consortium is setting up two mega thermal power projects with a capacity of 1,980 MW each.