Our Bureau

Mumbai , June 21

DEG, a German development financial institution, is acquiring a 14.99 per cent stake in the Ahmedabad based Aarvee Denim and Exports Ltd.

Aarvee is issuing 33.73 lakh equity shares of Rs 10 each at a premium of Rs 76 per share. Its shareholders okayed the proposal in a meeting on June 18. The shares are being issued by way of preferential allotment on private placement basis.

Aarvee is raising its authorised capital from the existing level of Rs 35 crore to Rs 50 crore. It will comprise 3.5 crore equity shares of Rs 10 each and 1.5 crore cumulative redeemable non-convertible preference shares of Rs 10 each. This is intended to raise funds for its proposed expansion and diversification plans.

The promoters will also subscribe to 9.72 lakh convertible warrants which would be convertible into equity shares of Rs 10 each before the end of 18 months from the date of allotment at the price of Rs 86 per equity share (including share premium of Rs 76 per share).

The amount payable on issue of convertible warrants would be 10 per cent of the total issue price and the balance will be paid at the time of conversion of warrants into equity shares.

With the preferential share allotment, the stake of the promoter group in the company would come down to 54.99 per cent from the current 60.07 per cent.

According to a press release, DEG's (Deutsche Investitions Und Entwicklungsgesellschaft mbH) interest in acquiring a stake in Aarvee comes in the wake of the latter's impressive fiscal performance. Aarvee's turnover for the year ended March 31 was Rs 232.71 crore, a 44-per cent increase over the previous year.

Aarvee has also undertaken a number of expansions and diversification projects. It is adding capacity of 14 million metres of denim fabric to its existing facility that produces 33 million metres a year.

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