Sical Logistics to raise $125 million

Sical Logistics Ltd (formerly South India Corporation (Agencies) Ltd) is planning to raise $125 million for funding coal and iron ore project, container operations, offshore logistics and trucking.

An earlier plan for a rights issue of shares, preferential allotment and convertible warrants has been cancelled.

The board of directors of the company has approved a resolution to raise up to $125 million through a mix of foreign currency convertible bonds (FCCB) and global depository receipts (GDR), a company release said.

"Taking into account the market valuation and Sical's business priorities, we believe that an FCCB-GDR mix is a sensible option, because of a number of reasons. It is relatively fast. Timing-wise, being closer to the market, we increase the probability of getting better valuations. Moreover, geographically our investor base gets more international," Ashwin Muthiah, vice-chairman, Sical, said.

The funds will be used for the coal and iron ore terminal project being set up on a build-operate-transfer (BOT) basis at Ennore, the container train operation on all India licence for the JNPT-Delhi and other three sectors-offshore logistics, trucking and for working capital.

"The recent union and railway budgets clearly emphasise the government's seriousness on infrastructure development and freight transportation. Sical, with its integrated model for multimodal bulk logistics, is uniquely positioned to leverage its current leadership position and customer relationships in the fast growing bulk logistics opportunity," he added.

The Chennai-based company also announced changes in its top management. The board has appointed R Ramakumar, director and COO of logistics division, as the managing director of Sical.

S Vasudevan, hitherto managing director of Sical, will be the managing director of company's new entity, consisting of non-core businesses that are proposed to be hived off from Sical.