Escorts Board Approves Raising of US$ 100 Million Equity Linked Instrument through QIP
Escorts Ltd. today announced the Board of Director’s approval for raising US$ 100 million Equity Linked Instrument through Qualified Institutional Placement (QIP).
Whilst the company debt levels have reduced considerably, the company would like to take more aggressive initiatives in
- reducing interest cost and improving profits
- to provide capital for growth
- to introduce new products into the market offering and further improve the market share.
There is also a need to fund balancing capital investment.
The company is now proposing to take this up in their Annual General Meeting on 24th February’07.
This enhancement of capital is at an opportune time to gain more momentum in the business, as the capital is required to support its robust plans of sales growth and profit improvement.
While the Company has already begun Road Shows, the shareholders’ approval for the issue of the securities to QIBs is likely to be obtained at the Annual General Meeting on 24th February 2007. It is expected that the subscription of capital will happen in early March 2007. The Company expects this to result in improved profits through interest cost reduction by more than Rs. 20 crores in the current fiscal year.