New Delhi, Jan 19: Moser Baer India will issue Global Depository Receipts (GDRs) to raise Rs 675 crore through the sale of 14.7 million underlying shares to affiliates of Warburg Pincus LLC.
The proceeds from the GDR issue will be used to finance the ongoing capacity expansion for optical storage media products, and will enable Moser Baer to significantly improve it’s market share to 18-20 per cent in the fast growing DVD-R market.
“This investment will enable us to scale up our DVD manufacturing capabilities and effectively leverage our low cost position, to meet the demands from our top-tier global OEM customer base. The contribution of DVD formats should rise sharply to over 30 per cent of revenues by financial year 2005,” said P. M. Pai, president, Moser Baer.
The company, which is involved in manufacturing high quality removable data storage products, also intends to issue warrants, equivalent to 5.4 million shares to affiliates of Warburg Pincus LLC.
The cumulative value of the above transaction, assuming all warrants are exercised, aggregates to Rs 675 crore (equivalent to $149 million at current exchange rates).
The allotment is expected to be done at a price of Rs 336 per share warrant reflecting a marginal 1 per cent premium to the closing price on January 16, 2004 on the National Stock Exchange. This proposal is subject to shareholder and other approvals.
The GDRs shall be fully paid up on the date of allotment and each GDR shall represent 100 underlying equity shares of the company. Each GDR shall be priced at an amount equivalent to Rs 33,600, translating into an effective price per underlying share of Rs 336. Each warrant is convertible at option of the investor into one equity share, at any time within 18 months from the date of allotment. The warrant holders will need to pay 10 per cent of the total consideration of the warrants upfront, which would be forfeited in the event the warrants are not exercised.
Deepak Puri, CMD of Moser Baer, said, “This investment by Warburg Pincus LLC further strengthens our long standing relationship with a high quality global investor and also provides impetus to our expansion plans.”
