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Wednesday, February 08, 2006

Sunstar Overseas to tap capital market

Rice exporter Sunstar Overseas will tap the capital market with an initial public offer to raise funds for setting up facilities for organic rice plant, besides meeting the working capital requirement, report agencies.

The public offer consists of 56 lakh equity shares of Rs 10 each comprising reservation of 2.8 lakh equity shares for permanent employees and the 'net issue to public' of 53.2 lakh equity shares, it said in a statement.

The company has already filed the draft prospectus with Sebi and now awaits approval.

The funds to be raised for meeting the working capital requirement, as mentioned in the draft prospectus, stands at Rs 34 crore (Rs 340 million) while the cost of setting up organic rice facility plant at Sonepat in Haryana has been pegged at Rs 3.74 crore (Rs 37.4 million).

The draft also states that the company would install a captive power generation plant at existing unit in Bahalgarh, Haryana with estimated cost of Rs 5.61 crore (Rs 56.1 million).

Besides, it proposes to set up a packaging plant at its existing unit with the cost of Rs 2.21 crore (Rs 22.1 million).

Moreover, it proposes to invest Rs 6.27 crore (Rs 62.7 million) in the automation and modernisation of its existing unit and Rs 1.73 crore (Rs 17.3 million) for adding a new storage facility there.

Sunstar also plans to invest Rs 1.3 crore (Rs 13 million) for adding new office block at existing unit and proposes setting aside Rs 1 crore (Rs 10 million) for meeting the contingencies.

The issue price for the offer would be done through book building process and any shortfall in the project cost would be met with internal accruals, the draft prospectus said.

The issue is likely to hit market sometime next month.

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