ICICI Sec is Bata rights issue lead manager

Footwear major Bata India has engaged ICICI Securities as the lead manager to its proposed rights issue. The issue is scheduled to hit the market by the end of March 2005.

The company plans to raise Rs 60 crore from its existing shareholders with some premium.

P K Nag director finance, said: "The issue would not be before mid March and the company will work out the details of the premium along with the lead managers in the next few weeks. The Bata India board wants the issue to be floated as soon as possible."

The board has recently passed the rights issue which would be part of the company's financial restructuring programme. Under the programme, Bata was also looking at fresh advances from existing lenders like banks and financial institutions.

Bata has in the recent past taken a conscious decision to convert itself primarily into a marketing company by outsourcing most of the products sold from domestic as well foreign manufacturers.

Its units in Batanagar in West Bengal will, however, continue manufacturing on a limited scale.

The company is also considering a second round of a voluntary retirement scheme to separate around 700 employees. At present Bata has around 11,300 employees and 4000 floor staff.

The financial restructuring was being undertaken to improve company's profit margins on products from 27 per cent to 35 per cent.

Officials said Bata was looking at all possible financial initiatives to raise additional funds with limited addition to its financial burden.

Bata is also looking at generating a portion of the fund required for restructuring from internal sources.

Restructuring would also involve closing down all of its loss-making stores in a phased manner, officials added.