ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Straw Products

rebate for use of minor oils of tree and forest origin in soap, abolition of sales tax and octroi on minor oilseeds and oils of tree and forest origin, fiscal incentives for producing more extract able rice bran and upgradation of ricebran oil for edible purposes and bet ter facilities for import of plant and machinery for modernisation of the vegetable oil industry, M P Mansinghka's presidential address, at the Indore convention offers an incisive assessment of the emerging oilseeds scenario and of the various issues confronting the in- dustry and trade which demand urgent official attention for evolving appropriate policy inputs to exploit the full export poten- tial of the oilseeds sector in the light of the comfortable domestic availability. He has drawn pointed attention to the acute in- frastructural inadequacies which are hampering the movement of export cargo by railways and at the ports, causing avoidable delays, enhancing costs and adversely affecting the competitive position of exporters in international markets. The need for removing logistic constraints on export perfor mance can scarcely be over-emphasised With its major worry over edible oil prices over, the government ought to address itself seriously to dealing with the various issues confronting different segments of the oilseeds industry. These include restrictions on the vanaspati industry depriving it of a level playing field with the competitive products, continuing imbalance between the availability of raw material and processing capacity in the wake of mushroom growth of solvent extraction units and infrastruc- tural deficiencies hampering exports which the government is endeavouring hard to promote IN THE CAPITAL MARKET Straw Products Straw Products, an existing profit earning, dividend-paying company, having diversified interests in the manufacture of paper cement and magnetic tapes, has taken in hand various investment plans entailing Rs 400 crore. These plans envisage moderni- sation-cum-expansion of the cement plant (Lakshmi Cement) for stepping up its installed capacity from 5.80 lakh tpa to 14.6 lakh tpa, expansion of capacity in JK Paper Mills in Orissa from 60,000 tpa to 75,500 tpa and participation in the takeover and rehabilitation of Central Pulp Milk in Gujarat in association with JK Industries. With a view to financing in part the total cost of the expansion schemes, meeting normal capital expen- diture, augmenting its long-term working capital resources and subscribing to the rights issue of JK Industries, the com pany is making an issue of equity shares, partly convertible debentures and non- convertible debentures with detachable equity warrants totalling Rs 269 crore The said issue includes a rights issue of equity shares of Rs 10 each at a premium of Rs 80 per share, 14 per cent secured partly convertible debentures of Rs 270 each and 16 per cent secured non- convertible debentures of Rs 130 each with detachable warrants aggregating Rs 227 crore to the shareholders on the record date, November 12, 1992. Equity shares of Rs 10 each at a premium of Rs 95 per share and non-convertible debentures with detachable equity war- rants totalling Rs 39 crore are being issued to the management group, besides equity shares at a premium of Rs 80 per share aggregating Rs 2.75 crore to employees and working directors of the company. The PCDs shall comprise two parts, Part A and Part B of Rs 90 and Rs 180 respectively. Part A of Rs 90 will be converted into one equity share at a premium of Rs 80 per share, six months from the date of allotment. The company has also tied up with Hongkong and Shanghai Banking Corporation for the- buy back of Part B of Rs 180, the non- convertible portion ('khoka') of the PCD. Those shareholders who would like to opt to sell the 'khoka' portion, will have to pay Rs 50 in addition to Rs 90 of pan A. Thereafter, Hongkong Bank shall make the payment on behalf of the debentureholder to the company. As such, each debentureholder will be effec- tively getting one equity share of the company at Rs 140. As a result of the rights issue of equity shares and PCDs, the shareholders holding 100 equity shares will be eligible for 105 shares within six months at a premium of Rs 80 per share. In addition, the holders of 16 per cent non-convertible debentures with detachable warrants would also be entitl- ed to exercise the option of buying one equity share against the warrant 36 months after the date of allotment of non-convertible debentures at a price of Rs 130 per share, with entitlement to 38 shares for every 100 shares held. The company's turnover is expected to in- crease from Rs 308 crore in 1992 93 to Rs 572 crore in 1996-97. Gross profit before interest and depreciation will go up substantially from Rs 50 crore to Rs 146 crore and profit after tax from Rs 12 crore to Rs 31 crore. The equity capital of the company, which is present- ly Rs 10.14 crore. will rise to Rs 23.62 crore after conversion of PCDs (1993-94) and Rs 28.37 crore after exercise of equity warrants (1995-96). The com parry's shares are already listed at Bombay, Calcutta, Delhi, Ahmedabad, Bhubaneswar, Jaipur and Indore stock exchanges.

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