Nicco to place 17% equity with R-ADAG arm

Sonata Investments and two non-Reliance firms involved.

Nicco Corporation will go in for private placement of 17 per cent of its equity to three financial investors including Sonata Investments, a Reliance-Anil Dhirubhai Ambani Group (R-ADAG) company.

The company has approved a preferential allotment of around 57 lakh optionally convertible cumulative preference shares (OCCPs) at Rs 22 each.

The Nicco Corporation scrip on Wednesday closed at Rs 17.70 on the Bombay Stock Exchange (BSE) and at Rs 17.80 on the National Stock Exchange (NSE).

According to the arrangement, Sonata Investments would be allotted 26,75,404 OCCPs, Niraj Realtor & Shares 26,75,405 OCCPs and Pinky Exhibitors would get 3,74,807 OCCPs. Post-issue persons acting in concert or promoter group would have 23.7 per cent in Nicco.

The authorised capital of the company would increase from 6.9 crore shares to 8.9 crore shares. The private placement was part of the financial restructuring exercise of the corporate debt restructuring (CDR) package.

At a recently held extraordinary general meeting (EGM), Rajive Kaul, chairman, Nicco Corporation said that the company would be in the black at the end of the current financial year. The company's turnover was expected to be in the region of Rs 350 crore.

In the previous financial year, Nicco posted a turnover of Rs 303 crore and incurred a loss of Rs 23 crore. The turnaround was possible because of the financial and business restructuring that the company underwent.

As a result of the restructuring, Nicco was able to bring down the settlement period for its different loans from 13 years to a little under seven years, resulting in major savings in interest payments.

As part of the restructuring plan, Nicco sold off its steel division at Kalyani in West Bengal a few years ago. The company also had a cable manufacturing unit at Kalyani, which was shifted with, which was shifted with all the equipment to its Baripada unit.

Land and building at Kalyani was transferred to a newly formed subsidiary - Nicco Biotech - for a consideration of Rs 12.70 crore while the surplus machinery of the Kalyani Telelink Unit was transferred to another subsidiary, NE Cables.