Financial Daily from THE HINDU group of publications
Wednesday, May 03, 2006
Corporate - Overseas Borrowings
3 Murugappa cos eye ECB route to raise funds
Carborundum Universal plans to raise $20 million
Coromandal Fertilisers, EID Parry yet to firm up plans
MR A. VELLAYAN, Director - External Relations
Chennai , May 2
Three companies of the Murugappa group, which today announced a Rs 880-crore capital expenditure for 2006-07, are likely to access the overseas market for debt funds. While Carborundum Universal has obtained its board's approval for a $20-million ECB (external commercial borrowing), EID Parry and Coromandel Fertilisers are yet to firm up plans.
But group officials say that they are likely to go in for ECB route for funds.
EID Parry, which has announced a joint venture with Cargill for setting up a sugar refinery in Andhra Pradesh, needs funds for the venture and the group believes it would be wise to borrow for that purpose.
Coromandel Fertiliser's plans for raising funds from abroad are, however, related to some developments in the fertilisers business.
In the current year, the group plans to invest in expansion of most of its operations. "Major expansion is underway in tubes, abrasives, sanitaryware, pesticide, sugar and auto components businesses," says a press release from the company.
At a press conference here today, officials also talked of "process changes, de-bottlenecking and balancing investment in unlocking latent capacity in the fertiliser units of Coromandel Fertilisers and Godavari Fertilisers."
They talked of "some exciting news in the upstream sector" in Carborundum Universal this year.
Also, investments will go into a tubes plant in China of Tube Investments of India and the sugar refinery in Andhra Pradesh.
Mr A. Vellayan, Director - External Relations, Murugappa group, told the press conference that the group's turnover had reached Rs 7,340 crore in 2005-06 and post tax profits, Rs 615 crore.
The group's market capitalisation had crossed the $2-billion mark, he said.
He said the group's "international agenda" for 2006-07 included acquisitions in engineering and material sciences fields.
He also hinted at a new project implementation and evaluation in the fertilisers business.
Asked about the proposed integrated steel project in Orissa, Mr Vellayan said the group would not proceed with the project until there was some clarity in the policy of the Orissa government on mining rights.
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