Morgan Securities buys 12.88% in Star Paper

Morgan Securities &Credits has acquired 12.88 per cent stake in Gouri Prasad Goenka-promoted Star Paper Mills.

In an intimation to the stock exchanges, the company has informed that Morgan Securities & Credits has acquired 20,10,000 shares translating to 12.88 per cent of the total paid up capital of Star Paper. The shares were acquired on March 28 and the mode of acquisition is through pledge.

According to the shareholding pattern filed by the company, as on December 31, promoters' holding was at 54.48 per cent, institutional investors at 9.83 per cent and 23.19 per cent with the Indian public. Goenka said, the acquisition would not bring down promoters' holding in any way. "It is outside the system" he said.

Meanwhile, the company has also finalised expansion plan and would be investing Rs 80 crore. Goenka said, the expansion would be funded through a mix of internal resources and debt.

The company plans to recommission its chemical recovery system, which would enable it to expand pulp capacity and captive power.

The recovery boiler has been upgraded and in conjunction with a new turbine it would enable the company to expand captive power generation, resulting in lower energy cost.

This was a part of the first phase of expansion in Star Paper's ongoing modernisation and expansion scheme.

Star Paper had lined up an investment plan of Rs 175 crore over three years, for modernisation and expansion. The current capacity of the plant was arouund 70,000 tonne, which would be increased to 1.50 lakh tonne by debottlenecking. However, even debottlenecking would require significant investment.

The company produced a range of industrial, packaging and cultural papers, catering to almost all segments of consumers.

Industrial paper contributes to nearly two third of the company's total revenues with the rest coming in from cultural paper, which constitutes both writing/printing and business communication segments.The mill located at Saharanpur in Uttar Pradesh has four mills.

The Star Paper scrip today closed at Rs 60.10 on Bombay Stock Exchange (BSE) and at Rs 60 on the National Stock Exchange (NSE). Volumes on BSE were at 39,041 shares and on NSE at 51,628 shares.