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Eveready Ind plans $40-m GDR issue

Our Bureau

Kolkata , Aug. 26

EVEREADY Industries India Ltd, the flagship company of the BM Khaitan Group, is looking for a Luxembourg listing of its proposed $40 million GDR (global depository receipts) issue.

ICICI Securities will be the merchant banker and the issue is likely to hit the market sometime in the end of October or early November, this year.

With this issue the promoters' stake in the company would drop to 47-48 per cent from the present level of 51 per cent.

At a board meeting on Friday, it was decided that 67.5 lakh convertible warrants would be issued to the promoters. The face value of one equity share would be Rs 5 with a premium of Rs 90 per share. The promoters will be chipping in with approximately Rs 65 crore by subscribing the warrants, which would mature after 18 months. With the conversion of these warrants into equity, the promoters' stake would again rise to 51 per cent.

Eveready Industries is hoping to raise approximately Rs 200-230 crore through these two issues.

It hopes to earn Rs 60-70 crore by selling space at its newly developed complex at Guindy near Chennai. Earlier, it was a battery manufacturing factory of it .

According to Mr Deepak Khaitan, Vice-Chairman and Managing Director, the money would be used partially to fund its ongoing expansion project at Uttaranchal. "We would also use some of the funds to reduce our debts. The company is also creating a war chest with funds, which would be used for acquiring some brands," Mr Khaitan told Business Line.

He, however, preferred not to disclose the exact division of the funds. According to him, it would be decided subsequently by the board of directors on a need-based basis.

Talking about the proposed GDR, Mr Khaitan said that the global road shows would begin soon. A senior company official clarified that the outer limit of the GDR is $40 million and the exact amount is not yet finalised.

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