Calcutta, Dec. 17: Jai Balaji Group will place 15 per cent of its stake with two US funds on a preferential basis. The funds will be used to fuel the companys expansion.
Citi Venture Capital Fund and India Equity Partners will pick up 11 per cent and 4 per cent of Jai Balajis post-diluted equity, respectively.
They will pay Rs 326.9 per compulsorily convertible debenture, putting in Rs 273.25 crore.
The Calcutta-based company will also offer shares to the promoter group and a few other investors on a preferential basis.
They will contribute a little over Rs 313 crore by subscribing to 96 lakh warrants at Rs 326.9 per warrant.
The company plans to raise Rs 587 crore by way of the twin equity offerings.
The compulsory convertible debentures and warrants will be converted into one equity share later.
The preferential allotment is subject to approval of shareholders at a forthcoming extraordinary general meeting.
The company has undertaken Rs 1,000 crore worth of expansion projects in Durgapur.
It will set up a 40MW power plant, a 4-lakh-tonne coke oven plant, a 1.15-million-tonne pellet plant, a 2.5-lakh-tonne pipes unit, a rolling mill and a 25,000-tonne ferro chrome plant there.
Moreover, the company has acquired two units recently.
Expansion plans for HEGs erstwhile steel business in Chhattisgarh and Nilachal Iron and Power Ltd in Orissa are being worked out.
Jai Balaji has also entered into a memorandum of agreement with the Bengal government to set up a 5-million-tonne steel, 3-million-tonne cement and 1,215MW power plant at Raghunathpur, Purulia, for Rs 16,000 crore.
It has also received primary approval to set up a steel SEZ in the state.
Jai Balaji clocked a turnover of Rs 527 crore in the half year ended September 2007 against Rs 1,073 crore a year ago.
Profit after tax stood at Rs 51 crore against Rs 62 crore in the corresponding period of the previous year.