Videocon to raise Rs 5000 crore

Videocon Industries Ltd plans to raise up to Rs 5,000 crore from a combined issue of global depository receipts (GDR), foreign currency convertible bonds (FCCB).

In a notice to the stock exchanges, the company said the Videocon board would meet on July 23 to consider the issue. The issue may be privately placed on preferential basis. It may also attach premium, the notice said.

Chairman Venu Gopal Dhoot said the move to raise a capital of not exceeding Rs 5,000 crore to save time, in case of necessity.

"The company does not want capital immediately. The fund situation can be taken care of the on-going expansion plans. However, the group may go for expansion or acquisition if it suits us," he said.

He explained that the money raising process will take at least 60 days to get all the necessary approvals, including that of shareholders.

The proposed move, which would be placed before the shareholders at the next annual general meeting, would save company from time lag between the identification of a target and its financing.

Videocon Industries recently signed an agreement to acquire the entire 91.25 per cent stake in Swedish major AB Electrolux's Indian subsidiary Electrolux Kelvinator Ltd (EKL).

In return, AB Electrolux will receive 5 per cent stake in Videocon Industries at $94 million (Rs 410 crore).

AB Electrolux will pick up this stake in Videocon Industries by subscribing to its global depository receipts (GDR) at $10 per GDR (each GDR representing one underlying equity share of the Videocon Industries). The entire process is expected to be completed by this week.

Videocon also acquired the colour picture tube business of Thomson for euro 240 million. In return , the French major will pick up a 14 per cent stake each in Videocon Industries and Videocon International.