Date:08/02/2005 URL: http://www.thehindubusinessline.com/2005/02/08/stories/2005020801870200.htm

Back Vijay Textiles buys 4.17 pc stake in Suryajyoti Spinning

C.R. Sukumar

Hyderabad , Feb. 7

VIJAY Textiles Ltd (VTL), the Rs 56-crore furnishings and upholstery fabrics manufacturer, is picking up 4.17 per cent stake in Suryajyoti Spinning Mills Ltd (SSML), the Rs 122-crore yarn manufacturer, through preferential offer route.

VTL is among the three non-promoter entities currently picking up a combined equity holding of 7.98 per cent in the Rs 13.78 crore of expanded equity base of SSML following the preferential offer.

The other two entities include Pankaj Fincap Ltd and Jyoti Bright Bard Ltd, which are acquiring 0.91 per cent and 2.9 per cent respectively.

While the promoter and Director of SSML, Mr Arun Kumar Agarwal, is subscribing to seven lakh equity warrants convertible into equity shares, the SSML promoter, Ms Neha Agarwal, is also subscribing to equal number of equity warrants.

Mr Arun Kumar Agarwal will end up with 5.63 per cent holding on the expanded equity base from the current level of 0.67 per cent, while Ms Neha Agarwal would have a stake of 7.37 per cent on the post-preferential allotment equity from the existing level of 2.8 per cent.

The SSML board recently approved a proposal to offer 14 lakh equity warrants of Rs 10 each convertible into equity shares at Rs 29 per share to the promoters as per the SEBI guidelines to raise an amount of Rs 4.06 crore.

The board has also decided to offer 15 lakh equity shares of Rs 10 each at Rs 30 per share in favour of non-promoters to raise Rs 3.3 crore.

An EGM of shareholders is being planned to obtain their consent for these proposals.

Following the preferential offer, the holding of promoters will increase to 41.55 per cent on the expanded equity from 38.35 per cent on the existing equity base of Rs 11.28 crore.

While the holding of private bodies corporate would increase to 11.01 per cent from the current level of 3.7 per cent, public holding in the company would come down to 47.43 per cent from 57.94 per cent.

Keeping in view the increasing requirement of funds for various expansions and diversification activities that have been chalked out, the company is also planning to increase its borrowing limits to Rs 100 crore from Rs 50 crore.

Having forfeited 3.81 lakh partly paid-up equity shares of Rs 10 each after serving several notices on the concerned shareholders, the SSML board has decided to reissue these forfeited shares at an appropriate time in the interest of the company.