Sona Koyo to expand at an outlay of Rs.400 Crores, to issue shares on preferential basis

Sona Koyo Steering Systems Ltd has announced that the Board of Directors of the Company at its meeting held on October 23, 2006, inter alia, has transacted the following:

While approving the CAPEX Plan of the Company of Rs 400 crores over the next 35 months, to part fund the said CAPEX, the Board has approved and recommended to the Shareholders to issue Equity Shares / Warrants to the Promoters and Foreign Collaborator of the Company, on preferential basis, as under:

- Name of the Investor : Dr. Surinder Kapur and / or persons / bodies corporate nominated by him

- No of Securities to be issued / allotted on Preferential basis : 4,023,122 Equity shares (face value of Rs 2/- each) & 7,989,828 Convertible warrants (face value of Rs 2/- each).

- Conversion of Warrants into Equity shares of face value of Rs 2/- each : 3,892,480 no of warrants on or before April 30, 2007 & 4,097,348 no of Warrants on or before April 30, 2008.

- Name of the Investor : JTEKT Corporation, Japan (formerly Koyo Seiko Company Ltd)

- No of Securities to be issued / allotted on Preferential basis : 604,983 Equity shares (face value of Rs 2/- each) & 2,009,957 Convertible warrants (face value of Rs 2/- each).

- Conversion of Warrants into Equity shares of face value of Rs 2/- each : 979,210 no of warrants on or before April 30, 2007 & 1,030,747 no of Warrants on or before April 30, 2008.

For the purposes of obtaining the requisite consent of the shareholders, an Extraordinary General Meeting of the Shareholders of the Company has been scheduled to be held on November 22, 2006. Accordingly, October 23, 2006 is taken as the 'Relevant Date' to determine the price at which the said securities are being issued on Preferential Basis, in terms of the provisions of the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000.

As on the relevant date on October 23, 2006, the 'SEBI Floor' works out to Rs 67.03 on Mumbai Stock Exchange on which the highest trading volume of the shares of the Company has been recorded during the preceding 6 months prior to the relevant date. The said 'SEBI Floor' is being determined on diluted basis considering the 'Bonus Issue' of shares being issued by the Company in the ratio of 1:1, pursuant to the approval of the Shareholders of the Company in their 22nd Annual General Meeting held on July 19, 2006 and for which September 15, 2006 was fixed as the 'Record Date'. As against the said 'SEBI Floor' of Rs 67.03 per Equity Share, the Price / Conversion Price i.e. the price at which the Equity Shares be issue / warrants shaft be converted into equity shares i.e. the Conversion Shares, has been fixed at Rs 67.10 per Conversion Share.

Source : Equity Bulls

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