The Hindu Business Line : Chettinad Cement revives Rs 250-cr rights issue proposal

Chettinad Cement Corporation Ltd has approved and revived an earlier proposal for a rights issue to its shareholders to raise Rs 250 crore, according to information provided by the company to the stock exchange.

The company plans to issue one new equity share on rights basis for every six held by a shareholder for a total value not exceeding Rs 250 crore. The price of the issue and premium are to be decided at a later date.

The company’s board decided on the rights issue in January to part finance a second two-million-tonne a year cement line at Ariyalur near Tiruchi to come up at a total cost of Rs 450 crore. But in June the company announced that the rights issue had been put on hold as the favourable prices of cement then would enable it to generate sufficient internal resources to fully fund the second line.

Chettinad Cements which has a 2.2 million tonne cement production capacity has announced two major expansion plans.

It is putting up a Greenfield cement plant and a 30 MW captive power plant in Ariyalur at a total cost of Rs 660 crore to be completed in March 2009. This is to be funded through a term loan of Rs 540 crore with the balance from internal accruals.

The company has also announced plans for a 2.5 million tonne cement plant and a 30 MW captive power plant in Gulbarga, Karnataka, at a cost of more than Rs 600 crore.

RESULTS

For the third quarter ended September 30, 2008, the company has reported a 33 per cent drop in net profit as compared to that of the corresponding period in the previous year.

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