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ReturnIndia:Eastern Silk to raise Rs 70 cr
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PublishDate：
2005-08-19 10:31:00
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Kolkata based Eastern Silk Industries Ltd (ESIL), one of the leading exporters of silk in the country, is planning to raise Rs 70 crore through foreign currency convertible bonds (FCCB) and private placement of equity for future expansion.
The chairman of ESIL, S Shah, said the company had already initiated discussions with five overseas as well as domestic financial institutions for FCCB and private placements.The company is hoping to finalise the FCCB issue within two months.
"We are in talks with financial institutions (FIs). It could be a combination of FCCB and private placement or a combination of both. We are currently examining the cost of capital in case of FCCB. If it is attractive enough then we might resort to only FCCB for funding," he said.
Shah said he was hoping to get cheap funds from overseas market as the company's performance was improving.
ESIL registered a 100 per cent jump in net profit in the first quarter of the current fiscal from Rs 3.95 crore to Rs 8.35 crore.
Topline also registered 33 per cent growth to Rs 87 crore. "This is the direct result of higher value addition and increasing share of machine made fabrics in the company's production," Shah said.
According to him, the group was also planning to merge some group companies like Eastern Jingying and Sstella Silks Ltd with ESIL.
The proposal was at present pending before the Karnataka High Court.
Describing the expansion plans of the company, ESIL director Sundeep Shah said that the company was now looking for forward integration opportunities in order to achieve greater value addition.
According to him, the company would be expanding its fabric capacity from 6 lakh metre per year to 12 lakh metres per year in two phases at its plant in Karnataka.
"We are also planning to set up a factory for silk made ups like garments, pillow covers and bed covers. This plant will be fully operational in next 12-15 months and will utilise the fabrics made at Anekal plant. This will be a new production line for us," he added.
