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The board of directors of Hindustan Copper has recommended dilution of 20% stake in the company. The new CMD of the public sector entity, Mr Shakeel Ahmed, said this on the sidelines of a seminar organised by CII here on Thursday.
Mr Ahmed said it was decided to peg the dilution at 20% at the recent board meeting. This decision is effectively a recommendation to the Government, which owns 99.59% stake in the listed company.
He expected that the Ministries of Mines, Disinvestment and Finance would consider the board's proposal before taking a final call.
The board recommendation comes ahead of the Government's decision on disinvestment, likely in the next financial year.
Mr Ahmed said Hindustan Copper needed funds for two of its three smelters' operational and mining expansions. Thus apart from divestment, Hindustan Copper has suggested that a follow-on offer would also be necessary to raise funds. The equity dilution would also increase the market float and activity in the stock.
Mining Operations of the company in Rajasthan and Madhya Pradesh have been affected by water shortage and the company needs to invest around Rs 50 crore to improve availability. It has also planned to restart mining at some of its unused mines in Jharkhand and Rajasthan.
Recovery in LME copper prices have improved the margins for the company but lower scale of operation, both mining and smelting, has forced the topline to decline.
The lower cash flow is one of the reasons for seeking funds by Hindustan Copper. Mr Ahmed indicated the company is planning to raise over Rs 1,500 crore to meet its planned expenditures.Taken from The Hindu Business Line
Hindustan Copper seeks 20% stake dilution
The board of directors of Hindustan Copper has recommended dilution of 20% stake in the company. The new CMD of the public sector entity, Mr Shakeel Ahmed, said this on the sidelines of a seminar organised by CII here on Thursday.
Mr Ahmed said it was decided to peg the dilution at 20% at the recent board meeting. This decision is effectively a recommendation to the Government, which owns 99.59% stake in the listed company.
He expected that the Ministries of Mines, Disinvestment and Finance would consider the board's proposal before taking a final call.
The board recommendation comes ahead of the Government's decision on disinvestment, likely in the next financial year.
Mr Ahmed said Hindustan Copper needed funds for two of its three smelters' operational and mining expansions. Thus apart from divestment, Hindustan Copper has suggested that a follow-on offer would also be necessary to raise funds. The equity dilution would also increase the market float and activity in the stock.
Mining Operations of the company in Rajasthan and Madhya Pradesh have been affected by water shortage and the company needs to invest around Rs 50 crore to improve availability. It has also planned to restart mining at some of its unused mines in Jharkhand and Rajasthan.
Recovery in LME copper prices have improved the margins for the company but lower scale of operation, both mining and smelting, has forced the topline to decline.
The lower cash flow is one of the reasons for seeking funds by Hindustan Copper. Mr Ahmed indicated the company is planning to raise over Rs 1,500 crore to meet its planned expenditures.Taken from The Hindu Business Line
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