Cash-strapped Ballarpur Industries Ltd (Bilt) is set to get Rs 112.5 crore as a result of conversion of the 25 lakh warrants held by group company Modern Agencies Ltd into 75 lakh equity shares at a premium of Rs 140 a share. Of this, Rs 105 crore will go into the L M Thapar group flagships share premium reserves .
The warrants had been allotted by Bilt to Modern Agencies responsible for distribution of Bilt paper in June 1993 and have become eligible for conversion this year. The premium of Rs 140 a share was part of the contract covering allotment of the warrants.
The Bilt board, which met in New Delhi yesterday, considered the application for conversion of the warrants and set up a sub-committee to look into the matter. The sub-committee will also consider the payment of call money involved in the conversion.
The conversion will raise Bilts total equity by Rs 7.5 crore. This additional equity will be added to the Thapars stake since Modern Agencies is a group company while the holdings of other shareholders will be diluted. At the end of 1996-97, the companys total equity was Rs 73.17 crore.
However, Saudi Arabian trading and investment company Al Murjahn had recently picked up 16.7 per cent equity in Bilt on the condition there would be no dilution of its stake in future. The sub-committee will consider this conundrum in consultation with the Saudi company.
The Bilt board also authorised the management to go ahead with what it considers right in the case of the loss-making Pioneer newspaper.
The board also decided to extend the 1997-98 financial year by three months to June 30, 1998. Besides, it decided to seek the permission of financial institutions for the companys restructuring plan.
In 1996-97, Bilt had recorded a net profit of Rs 38 crore on a gross income of Rs 1,343 crore. The company brought forward profits worth Rs 31 crore, thereby shoring up the bottomline to Rs 69.09 crore. The reserves and surpluses stood at Rs 684 crore.
