Cement maker Birla Corporation, the flagship firm of the M P Birla Group, will seek shareholders' nod to raise funds on a private placement basis for expansion including acquisition of greenfield and brownfield cement plants.
The firm will hold a postal ballot to take the approval of shareholders for a special resolution to raise funds.
The special resolution if "for making one or more offer or invitation to subscribe to Secured or Unsecured Bonds/Non-Convertible Debentures (NCDs)/other Debt Securities on private placement basis," the company in a regulatory filing.
This will be in one or more tranches on such terms and conditions as the Board of Directors...May from time to time determine or consider proper, within the overall borrowing limits of the company, as approved by the members, from time to time, the filing added.
Explaining the rationale behind the activity, Birla Corporation said: "To expand the operation and to increase the cement capacity the company is consistently exploring various opportunities including acquisition of cement business by acquiring greenfield/brownfield cement plants."
Significant capital expenditure will have to be incurred on fructification of such project/acquisition. Therefore, it would be necessary for the company to raise funds in one or more tranches, it added.
To provide flexibility regarding borrowings in an optimal manner, depending on market conditions, it is proposed to borrow and raise by issue of unsecured/secured bonds/ Non-Convertible Debentures (NCDs)/other Debt Securities on private placement basis, as may be appropriate from time to time, the firm explained.
The development comes in the backdrop of Anil Ambani-led Reliance Infrastructure's bid to sell cement business going in to advanced stage of negotiations with Birla Corporation being one of top three potential buyers.
Besides Birla Corp, private equity firms Blackstone and Baring are the other top contenders for the about Rs 5,000 crore deal, people in know of the development said.
On January 11, Birla Corp in a BSE filing had said: "With a view to expand cement business, the company keeps on evaluating and discussing various opportunities as may be available from time to time."
"However, no proposal has reached the stage, which would merit intimation under the Listing Regulation," it had said.
The firm has a total operational cement capacity of about 10 MTPA with units in Rajasthan, Madhya Pradesh, Uttar Pradesh and West Bengal.
Shares of the company closed 1.83 per cent up at Rs 404.20 apiece on BSE.
