Gujarat NRE to float rights issue

Gujarat NRE to float rights issue
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First Published: Wed, Sep 17 2008. 03 40 PM IST
Updated: Wed, Sep 17 2008. 03 40 PM IST
PTI
Kolkata: The promoters of Gujarat NRE Coke will float a rights issue with differential voting rights (DVR) to ward off any takeover threat from companies seeking to secure coking coal assets.
“The decision to float a DVR rights issue was to raise voting rights of the promoters to ward off any takeover threat,” Gujarat NRE’s Vice-Chairman and Managing Director Arun Jagatramka told reporters.
“This is merely a preventive action,” Jagatramka said after the company’s annual general meeting.
He said after the rights issue voting rights of the promoters, whose existing holdings stood at 41%, would go up to over 51%. The promoters’ holdings at 41% would remain unchanged.
Jagatramka said since the rights issue had been priced at Rs1,000 per share, with premium of Rs900, it is felt that the minority shareholders would not participate in the float. The current share price of the firm is hovering around Rs160.
Institutions investors together hold 41% stake in the company, while the remaining 18% was public float.
He stated that coking coal, primarily used for steel making, was a scarce commodity, adding that many steel firms were trying to secure coking coal assets abroad, but without success.
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First Published: Wed, Sep 17 2008. 03 40 PM IST