The Hindu Business Line : Everest Kanto shares for Brightwill

Everest Kanto Cylinder Ltd (EKCL), engaged in manufacture of high pressure gas cylinders, on Friday announced the issue of 18,96,900 equity shares to Brightwill Ltd, a subsidiary of a fund managed by CLSA Pvt Equity Management Ltd, on a preferential basis at a price of Rs 485 per share. This aggregates to a total investment value of about Rs 92 crore.

A company press release said the preferential allotment would be subject to a lock-in period of one year in accordance with SEBI Guidelines.

The preferential issue of shares would result in additional issue of shares of 9.72 per cent of the enhanced equity share capital. Post issue, the promoters holding in the company will stand at 61.5 per cent.

Expansion plans

The proceeds of the preferential issue will be used to part-fund the company's on-going expansion plans in China, Dubai and India. The company will be convening an Extraordinary General Meeting for shareholders' approval of the preferential issue on October 20.

The company has set-up a new manufacturing facility at Dubai to cater to the demand potential from West Asia, CIS countries and South Asia. The production at the new unit is expected to commence in the third quarter of the current financial year.

The release said in order to synergise the operations of this unit and EKC International FZE, a wholly owned subsidiary in Dubai, it has been proposed to sell all the fixed assets of the unit to EKC International FZE. On completion of the expansion plan, the total capacity in Dubai will be 2 lakh units.

EKC recently commissioned its greenfield plant at Gandhidham in Gujarat with a capacity of 3,40,000 cylinders per annum. Further, it has formed a separate wholly owned subsidiary company in China named EKC Industries (Tianjin) Co Ltd to manufacture high-pressure gas cylinders and other allied products of the company. It plans to invest $50 million in the China project.

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