The Hindu Business Line : Usha Martin board okays GDR issue of $25 m

THE board of directors of Usha Martin Ltd today approved the issue of GDRs/FCCBs of up to $25 million (Rs 110 crore) along with green shoe option of 20 per cent, and a preferential issue of convertible warrants to promoters.

The proposed GDRs/FCCBs shall be listed on the Luxembourg Stock Exchange. An extraordinary general meeting of the company has been convened on September 28 to seek shareholders' approval.

According to a company press release issued here, the board of directors has cleared the proposal to issue 58 lakh convertible warrants to the promoters' group and associates. Each warrant would be priced at Rs 153 in respect of each share of the face value of Rs 5.

The proposed allottees have agreed to subscribe to the warrants at the stipulated price by making an upfront payment of 10 per cent and exercise their option to convert the warrants into equity shares by paying the balance 90 per cent of the consideration. The equity shares thus allotted shall be subject to a lock-in period of three years from the date of issue of the warrants.

Usha Martin proposes to fund its expansion programme through a combination of GDRs, convertible warrants, internal accruals and debts. The board of directors has approved a capital expenditure plan of Rs 462 crore that would be spent on strengthening the company's wire and wire rope business, expansion of its steel making capacity and expenditure on coal mining activity, the release adds.

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