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Thursday, Sep 22, 2005

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Nagarjuna Construction plans $120-m global offering

Our Bureau

Hyderabad , Sept. 21

NAGARJUNA Construction Company Ltd (NCC) plans to raise funds to the tune of $120 million through global offering to fund its investment requirements in implementing BOT/BOOT projects and also to meet working capital and long-term funds requirements.

The company proposes to raise the funds either through issue of global depository receipts (GDRs) or foreign currency convertible bonds (FCCBs) or a combination of both. Having recently obtained the board approvals for the proposal, the company now plans to seek the consent of its shareholders at the ensuing extraordinary general meeting.

According to a senior NCC official, with the Government laying more thrust on infrastructure related projects, the construction industry has been performing well. The opportunities are steadily growing for those construction companies that are specialising highways, roads, water pipeline projects, hydroelectric projects and urban infrastructure projects.

The NCC official said: "Keeping in view the huge potential available for the infrastructure projects and in particular road projects and hydel projects that may be announced under the BOT/BOOT scheme, it is considered very necessary that the net worth of the company should be increased for being eligible for bidding for and executing more number of projects."

In view of the proposed issue of GDRs/FCCBs, the company also proposes to alter its authorised share capital. The present authorised capital stands at Rs 25 crore dividend into 10 crore equity shares of Rs 2 each amounting to Rs 20 crore and 50 lakh redeemable preference shares of Rs 10 each amounting to Rs 5 crore. The company proposes to replace the preference capital with equity capital. Following this, the authorised capital will consist of 12.5 crore equity shares of Rs 2 each aggregating to Rs 25 crore.

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