News: Escorts to raise $100 mn

(BL 26/01/2007) New Delhi - Escorts Ltd on Thursday announced that it would raise $100 million (about Rs 450 crore) through the issue of equity-linked instruments through Qualified Institutional Placement (QIP).

The company said though its debt levels have reduced considerably, it would like to take more aggressive initiatives in reducing interest cost and improving profits, providing capital for growth and introducing new products into the market.

There is also a need for fund balancing the capital investment, the company said. "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 February 24. 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 crore in the current fiscal year.