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| Trinetra to allot Rs 615 cr shares to India Cements |
| T E Narasimhan / Chennai Nov 11, 2011, 00:33 IST |
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Trinetra Cement Ltd is planning to allocate shares worth around Rs 615 crore to Chennai-based India Cements through preference shares.
India Cements Ltd, south India's largest cement manufacturer by volume, had acquired Trinetra Cement during last fiscal through its subsidiary ICL Financial Services Ltd in March last year.
The company, which had set up a cement plant at Banswara, Rajasthan, with a capacity of 1.5 mtpa (million tonne per annum) commenced trial production in August 2010 and commercial production from January 2011.
It is also in the process of commissioning a 20-Megawatt thermal captive power plant and in the process of acquiring lands for mining to take care of any future expansion, according to company's statement to shareholders.
The total cost of the project, along with the captive power plant, is around Rs 600 crore.
During the course of revival and expansion of the capacity of the cement plant, Trinetra had availed of financial assistance from India Cements for meeting various requirements including cost overruns on the construction of the cement plant, operations of the plant, working capital requirements and implementation of power power plant. The total amount outstanding as on September 30, 2011, accumulated to Rs 725 crore.
The company had requested India Cements to converting the outstanding loans not exceeding Rs 615 crore to investment by subscribing to non-convertible, non-cumulative redeemable preference shares of the face value of Rs 100 each. India Cements acceded to the request.
Trinetra, formerly Indo Zinc Ltd, was formed in 1987 with a focus to manufacture and trading of zinc, brass and other ferrous and non-ferrous metals. In 1988-89, it had set up a primary zinc plant in Pithampur, Madhya Pradesh. In 1993, it raised funds through an initial public offering to partly fund the construction of an electrolytic copper refining facility at Pithampur. This project, however, was subsequently abandoned.
In 1995, Mahi Cement Limited, which was in the process of constructing a cement plant in Banswara was amalgamated with the company. However, the company later faced financial difficulties and had to suspend construction of this plant.
In 1998, it was classified as a sick industrial company. India Cement through its subsidiary acquired equity shares of the company and subsequently entered into a share purchase agreement with the erstwhile promoters and acquired further shares through an open offer. All of these together resulted in ICLFSL acquiring a majority stake and control of the company.
Simultaneously, the abandoned cement plant at Banswara was revived.
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