Moser Baer eyes Rs 675 cr via GDRs

NEW DELHI: Moser Baer India Ltd (Moser Baer), manufacturer of high quality removable data storage products, has announced that it proposes to issue Global Depository Receipts (GDRs) equivalent to 14.7 million underlying shares to affiliates of Warburg Pincus LLC. In addition to the above, the company also intends to issue warrants, equivalent to 5.4 million shares to affiliates of Warburg Pincus LLC. The cumulative value of the above transaction, assuming all warrants are exercised, aggregates to Rs 675 crore (equivalent to $149 million at current exchange rates).

The allotment is expected to be done at a price of Rs 336 per share / warrant reflecting a marginal one percent premium to the closing price on January 16, 2004 on the National Stock Exchange. This proposal is subject to shareholder and other approvals. The GDRs shall be fully paid up on the date of allotment and each GDR shall represent 100 underlying equity shares of the company.

Each Warrant is convertible at the option of the investor into one equity share, at any time within 18 months from the date of allotment. The warrant holders will need to pay 10 percent of the total consideration of the warrants upfront, which would be forfeited in the event the warrants are not exercised.

The proceeds from the GDR issue will be used to finance the ongoing capacity expansion for optical storage media products, and according to the company will enable it to significantly improve its market share to 18 percent -20 percent in the fast growing DVD-R market. The company expects the contribution of DVD formats should rise sharply to over 30 percent of revenues by FY05.

Post the issue, the company's largest financial investors, besides Warburg Pincus, like, International Finance Corporation and Electra Partners Mauritius Ltd., continue to remain significant shareholders with an 11.1 percent and 5.7 percent holding of the fully diluted equity of the company. Citigroup is the sole financial advisors to the company on this transaction.

(CyberMedia News Service)