Kolkata, September 17th 2008.
The Board of Directors of Gujarat NRE Coke Limited met in the city today and discussed various matters regarding the performance and future plans of the company. Armed with shareholders approval at its AGM held today, for the issue of bonus shares in the ratio of two shares for every five held, the Board set the record date for same as 20th October 2008. Also the Board has decided to approach its shareholders seeking their approval for re-classification of the Authorised Capital and amendment of relevant clauses of the Memorandum & Articles of Association of the Company for issue of Equity Shares of Rs.10/- each with differential rights (differential rights as to dividend, voting or otherwise), upto an amount not exceeding 25% of the total issued Equity Share Capital of the Company, with power to the Board to decide on the extent of variation in such rights and to classify and re-classify from time to time such shares into any class of shares.
After obtaining shareholders approval for the same the company proposes to issue rights shares with differential voting rights (DVR) to the existing shareholders of the company in the ratio of 1 DVR share for 450 existing equity shares at a price of Rs 1000 per DVR share. The shares will carry higher voting rights while pari pasu in all other respects to the existing equity capital of the company. .The issue proceeds will be utilised to part finance the company's future expansion plans.
Explaining the rationale behind the move, Sri Arun Kumar Jagatramka, Vice Chairman and Managing Director said," Currently, issue of DVR shares appears to be a better option for raising promoter’s voting rights in the company than the conventional preferential issue route, which is generally considered unfair to the interest of the minority shareholders. The higher premium and lower dilution will help enhance the book value and benefit the non promoter shareholders. From where I see it, it is a win win situation."
Gujarat NRE Coke, the country's largest independent coke producer is currently riding the crest of a global price upsurge which is being consistently reflected in its performance over the last few quarters. Coke prices, which were hovering at around Rs 6000 - 8000 in December 2006, has since gone up to a historic high of Rs 30,000 to 35,000 in the current quarter. Moreover, China, which dominates the global market in the commodity and benchmarks its price around the world, is steadily moving towards a regime of curtailed, tax controlled regime and has raised the export duty from 25 % to 40 % in July this year, which has lead to a further supply crunch and consequent price rise. The company has also declared plans to set up a Greenfield 1 million ton coke plant in the Nellore district of Andhra Pradesh. The Company’s present coke production capacity of 1.006 million tonne is being expanded in a phased manner to 1.254 million tonne and 2.254 million by 31st March 2009 and 31st December 2010.
The Company is the only company owning and operating coking coal mines in Australia and both mines are now in production. During the current fiscal the ROM coking coal production from its two mines is expected to be in excess of 1million tonne and brownfield developments are underway to ramp up the production to beyond 7 million tones by 2012/13. Hard coking coal prices are also rising very rapidly as is evident in annual contract prices rising form USD 96 per MT in 2007 to USD 300 per MT in 2008, and as against annual contracted rates of USD 300 per MT, the current spot rates range between USD 380 – 400 per MT; and even at this price the availability is scarce.
For More Information Contact :
Mr P R Kannan, Chief Financial Officer
+ 91 9836074444 or +(61)425383600 |