Date:07/02/2005 URL: http://www.thehindubusinessline.com/2005/02/07/stories/2005020701371300.htm

Back SPEL Semiconductor to raise authorised capital to Rs 60 cr

M. Ramesh

The overseas equity funding is expected to be needed because the company is getting into a new range of products.

Chennai , Feb. 6

SPEL Semiconductor Ltd proposes to raise its authorised capital from Rs 50 crore to Rs 60 crore. According to company sources, the company is looking for some overseas equity funding.

The existing authorised equity capital needs to be raised because a restructure is under way to convert the parent company's (SPIC) loans into equity. The restructure will convert Rs 36.8 crore of SPIC's loans to SPEL into equity at a price of Rs 25 a share. When that happens, SPEL Semiconductor's equity capital would be around Rs 45.6 crore, which is very close to the authorised limit.

SPEL manufactures integrated circuits. In 2002-03, it exported 41 million ICs and earned a revenue of Rs 53 crore.

However, in the subsequent year, uncertainty arising out of Iraq war and the SARS epidemic affected sales, according to SPIC's annual report for 2003-04.

The overseas equity funding is expected to be needed because the company is getting into a new range of products — crystal oscillators, used in the electronics industry.

The company has informed the Bombay Stock Exchange it also proposes to convert its non-trading liaison office in the US into a full-fledged subsidiary, in order to comply with US regulations. It plans an ESOP scheme.