Sekurit Saint-Gobain, the $18-billion industrial conglomerate of France, has hiked its equity stake in its Indian arm Sekurit Saint-Gobain India from 51 per cent to 75.5 per cent by buying out the under-subscribed portion of the latter's recent rights issue.
This is for the second time that the French conglomerate is hiking its equity stake in the local arm.
In December 1997 the French firm had taken complete management in the Indian unit arm by purchasing 45.53 lakh equity shares at Rs 19.75 per share (including Rs 9.75 premium per share). Sekurit Saint-Gobain, thus, increased its stake from 26 per cent to 51 per cent.
The main reasons for the poor response to the company's rights issue which closed for subscription on March 24 have been attributed to the recession in the automotive industry and the company's large accumulated losses. As of March 1999, the losses at Sekurit Sanit-Gobain were to the tune of Rs 22.5 crore.
The company had offered 1.95 crore equity shares of Rs 10 each at par aggregating to Rs 19.52 crore in the ratio of three for every two shares held. Only 15 per cent of the individual shareholders portion got subscribed.
The objective of the issue was to part-finance the new project at Bhosari near Pune with a capacity to produce 24 lakh pieces of toughened safety glasses for window and back glasses per annum for the automotive industry.
The company will also utilise a part of the funds to undertake capital expenditure to upgrade its Chakan plant.
The Bhosari unit is scheduled to begin commercial production in August. This will hike the company's total
