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Excel Glasses announces rights issue

The Indian company, Excel Glasses, has announced a rights issue of 53.60 lakh equity shares of Rs 10 each for cash at par aggregating Rs 5.36 crore to the existing shareholders in the ratio of five ne…

The Indian company, Excel Glasses, has announced a rights issue of 53.60 lakh equity shares of Rs 10 each for cash at par aggregating Rs 5.36 crore to the existing shareholders in the ratio of five new shares for every four held. The proposal has already been approved by the board of directors, shareholders and the Securities and Exchange Board of India (SEBI), according to company sources. Excel Glasses has a paid-up capital of Rs 5 crore. The company runs a glass-bottle manufacturing plant in Alappuzha in Kerala. The proceeds of the issue would be utilised to retire high-cost institutional loans as a part of the debt-restructuring programme proposed and approved by the consortium of institutions led by ICICI. The Kerala State Industrial Development Corporation (KSIDC) holds 3,07,400 shares in the company, which works out to 7% of the present share capital. The issue opens on 23 February and will be open for 30 days. Sumedha Fiscal Services, Mumbai, will act as the lead manager to the issue, while Sharex (India) Pvt Ltd, Mumbai, will be the registrar. The company, whose plant is located in Alappuzha district known for its huge silica deposits, intends to invest Rs 2-3 crore in setting up one more glass forming machine as a part of its next expansion plan. Once this is done, the capacity utilisation is expected to go up from the existing 80-85% to 110%. But, the development plan will be feasible only if the 24% entry tax on furnace oil is withdrawn forthwith, according to Mr B.G. Agarwal, Vice-President (Commercial). “We are awaiting a favourable response from the State Government in this regard,” he said. The company was making profit for 15 years before it fell into the red in 1995. It reverted back to profit in 1999 and is expected to break even during this year, according to Mr Agarwal. The liquor, food, beverages and pharma sectors spread mostly in the southern States account for almost 85% of the company“s market.

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