Uttam Sugar Mills today said it will raise Rs 27.21 crore through rights issue to fund working capital requirement.
The company would issue 1,23,69,120 equity shares at Rs 22 per share,which is lower than the today’s closing price of Rs 24.15 a piece on the BSE.
It would issue 12 equity shares to existing shareholders for every 25 equity shares held by them on September 7. The issue would open on September 20 and close on October 4.
“Issue is of 1,23,69,120 equity shares of Rs 10 each at a price of Rs 22 per equity share for cash aggregating to Rs 27,21,20,640 to the existing shareholders on rights basis in the ratio of 12 equity shares for every 25 equity shares held by the shareholders on the book closure date i.e. September 7,2012,” Uttam Sugar said in letter of offer.
The objectives of the rights issue are financing the capital contribution margin for additional working capital and repayment of interest free unsecured loan temporarily taken from promoters to fund margin for additional working capital.
“Our company intends to deploy the net proceeds of the issue mainly to finance a portion of working capital gap in terms of CDR approved scheme a part of which has been temporarily financed through interest free unsecured loan received from promoters which shall also be repaid out of the issue proceeds,” it said.
The company would utilise Rs 19.89 crore in long term working capital gap and Rs 6.75 crore in repayment of interest free temporary unsecured loan.
Uttam Sugar Mills has four plants with a total installed crushing capacity of 23,750 tonnes per day.
Promoters have 78.07 per cent stake in the company as on June 30,2012. The company had posted a net loss of nearly Rs 70 crore on a total income of Rs 685 crore in 2011-12 fiscal.