Mysore Cements Ltd (MCL) has proposed to induct Nesher Israel Cement Enterprises Ltd of Israel (Nesher) as a co-promoter by issuing 15 per cent of MCL's paid-up equity share capital to the latter or its associate firms.
In a resolution passed at the company's board meeting yesterday, MCL's board has approved a proposal for the issue of equity shares not exceeding 15 per cent of the paid-up equity share capital of the company to Nesher or any of its associates and foreign institutional investors (FIIs), etc.
The issue of shares will be for an aggregate amount not exceeding Rs 20 crore including any premium. However, the company held that the issuing of shares to Nesher will be subject to relevant approvals by the Securities and Exchange Board of India's (Sebi) preferential issue guidelines and also by further negotiations with them.
This follows a series of talks held with Nesher Israel by Birla Eastern Ltd and subsequently by MCL in connection with Nesher joining the company as a co-promoter. Nesher, with an installed annual capacity of 7.5 million tonne of cement, is a wholly-owned subsidiary of Mashav Initiating and Development Ltd which has subsidiaries in different sectors like cement, fuel, road and real estate.
Inducting Nesher into the MCL board is expected to benefit the company in view of Nesher's experience in the cement industry.
According to the resolution, the company is also holding discussions with FIIs, overseas corporate bodies (OCBs), and mutual funds (MFs) for preferential allotment of equity shares of the company on private placement basis. The terms of the proposed allotment will be firmed up soon. As per the resolution, MCL proposes to issue equity shares of up to 83.25 lakh on private placement basis from time to time in one or more tranches to Nesher and/or its associates, etc.
The company also announced the financial results for the last 15 months ended on June 30, 1998, at the meet. MCL's net profit has gone up to Rs 41.84 crore during this period as against Rs 13.78 crore during the previous year ended on March 31, 1997. Its turnover has gone to Rs 401.42 crore from Rs 347.75 crore in the last financial year.
