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Business News/ Market / Stock-market-news/  IL&FS Transportation’s Rs524 crore rights issue to open on Monday
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IL&FS Transportation’s Rs524 crore rights issue to open on Monday

Proceeds to be utilized mainly for repaying loans

IL&FS Transportation had an outstanding loan of more than Rs800 crore, as on 10 March 2014. Photo: MintPremium
IL&FS Transportation had an outstanding loan of more than Rs800 crore, as on 10 March 2014. Photo: Mint

Mumbai: The 524 crore rights issue of IL&FS Transportation Networks will open on Monday and the proceeds will be utiliZed mainly for repaying loans. The company will issue 52.40 million equity shares of face value of 10 each for cash at 100 per share (a premium of 90) for an aggregate amount of up to 524.52 crore to the existing investors.

The issue will close on 12 May, according to the offer document filed by the company with market regulator Securities and Exchange Board of India (Sebi).

Every shareholder who has 100 shares will be eligible to buy 27 shares of the company.

In a rights issue shares are issued to existing investors as per their holding at a pre-determined price and ratio.

The Mumbai-based firm which is one of the largest private sector operator of build operate transfer (BOT) roads, plans to use the proceeds for repaying loans and other general corporate purposes.

As per the IL&FS Transportation’s offer document, the firm will utilize 510 crore from the net proceeds of the issue towards repayment/pre-payment, in full or part, of certain loans availed by it.

The company had an outstanding loan of more than 800 crore, as on 10 March 2014.

“We believe that reducing our indebtedness will result in an enhanced equity base, assist us in maintaining a favourable debt-equity ratio in the near future and enable utilisation of our accruals for further investment in business growth and expansion," said the offer document.

“In addition, we believe that the leverage capacity of our company will improve to raise further resources in the future to fund our potential business development opportunities and plans to grow and expand our business in the coming years," the company added.

It will use 8 crore on strategic initiatives, brand building, marketing, partnerships, joint ventures, meeting exigencies or for other purposes as approved by the board.

Axis Capital, CLSA India, SBI Capital Markets and IL&FS Capital Advisors are acting as lead mangers to the rights issue. Link Intime India is the registrar to the issue.

NSE will be the designated stock exchange for the issue.

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Published: 27 Apr 2014, 08:07 PM IST
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