Radha Madhav to issue shares on preferential basis for expansion projects

Radha Madhav Corporation Ltd has announced that the Board of Directors of the Company at its meeting held on February 06, 2007 has approved the following:

1. Issue of Convertible Redeemable Preference Shares on preferential basis up to 10 Million USD to Deutsche Bank Group ("DB") through its subsidiaries or affiliates convertible into equity shares at a price not lesser than price calculated as per SEBI DIP guidelines.

2. Issue of Convertible Preference Shares on preferential basis of Rs 90.00 Million to Concordia Asia Pacific Multi Strategy Fund convertible into equity shares at a price not lesser than price calculated as per SEBI DIP guidelines.

3. Issue of 1 million equity shares on preferential basis to India Star Mauritius at the rate of Rs 65.00 per share aggregating to Rs 6.50 Crores.

4. The board has further approved issue of 51.75 Lacs warrants on preferential basis convertible into equity shares at a price of Rs 65.00 per warrant, out of which 14 Lacs warrants will be allotted to promoters 2 Lacs warrants will be allotted to Somerset India Fund - Rhodes Diversified and balance 35.75 Lacs warrants to non promoters.

The Company is implementing project to manufacture sophisticated and high end packaging material to pack pharmaceuticals and medical components at an estimated cost of Rs 175.00 Crores. This project was earlier conceived to be implemented in two distinct phases. However, now the Company is implementing the project in one single phase.

Above funds conclude the resources to be raised through equity and remaining fund shall be raised only through pure debt instruments from banks and financial institutions

Machineries for the project are procured from best of the suppliers in Germany, Korea and Italy making it technically superior and efficient in operating. The Company's unique technological advantage will result into better wastage and recipe cost control. The project is being installed in clean-room facility of global standard. With this project, the product mix of the Company will be predominately niche yielding better operating profit margin and hence better earnings for the shareholder.

Company believes that this project will give substantial jump to the sales and profit of the Company. The new products to be added in the new Pharma packaging project are exceeding 45000 MT per annum making the capacity largest in the country to produce such products comprehensively. The packaging products will be used to pack bulk drug, solid dosages, liquid syrups, ointments, medicinal apparatus. This packaging material will be anti-counterfeiting and will be of global standards prevailing in Europe and USA.

Source : Equity Bulls

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