The Hindu Business Line : Magma Leasing to raise Rs 122 cr through pvt placement

The board of directors of Magma Leasing Ltd at its meeting here on Thursday approved raising of Rs 121.82 crore through private placement with global investors.

Talking to Business Line, Mr Sanjay Chamria, Managing Director of Magma, said while the UK-based Cambridge Place Investment Management (CPIM) will invest Rs 108.10 crore, the US-based Aeneas Evolution Portfolio will put in Rs 13.72 crore.

According to him, the funds raised will improve the rating and strength of the company's balance sheet, "augmenting our ability to write higher volume of business and enabling us to maintain a strong growth momentum".

The equity shares allotment of 26.7 lakh shares to CPIM will represent 14.99 per cent of the company's fully diluted post-placement capital. Rothschild India has advised CPIM on its investment in Magma. Placement with Aeneas will account for 4.28 per cent of company's post-placement fully diluted equity capital.

The US company has assets under management worth over $2 billion.

ENAM Financial Consultants has acted as advisors. Both transactions are subject to shareholders approval at Magma's AGM scheduled for July 31.

The CEO said while the primary focus would remain on growing business operations through both product range augmentation and widening of geographical reach, Magma also aims to secure its long-term capital requirements through this investment.

Mr Chamria said investment from CPIM involves the use of a combination of instruments such as equity shares (cash investment in 26.72 lakh shares of face value of Rs 10 at a price of Rs 180, representing a premium of Rs 170 per share), and optionally convertible preference shares (investment in 30 lakh OPCS of Rs 100 each at a price of Rs 100 per OCPS for a period of 7 years)unless converted as per the SEBI norms subject to a minimum of Rs 180 and maximum of Rs 200.

The placement also involved cash investment in 30 lakh non-convertible preference shares of Rs 100 each at a price of Rs 100 per NCPS for a period of 7 years (at a dividend of 5 per cent and premium of 5.5 per cent payable on redemption).

Investment from the New York-based Aeneas is for 7.62 lakh shares of Mahma at a price of Rs 180 per share.

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