According to a notice filed on the exchange, Siddiqsons Tin Plate Company today announced that “the board of directors of the company with an aim to add backward integration facility to the existing business, has resolved to setup a brownfield CRC Complex with a production capacity of 200,00 million tons per annum.”
The Board of Directors of Siddiqsons Tin and Plate has decided to “issue right shares at a ratio of 1.92:1 (150,819,864 ordinary shares of Rs. 10/- each) at a premium of Rs. 2.00 per share in proportion of 192 share for every 100 shares of Siddiqsons Tin Plate Limited.”
The notice further mentioned that, “the capital expenditure required for the project is Rs. 6,000 million.”
The company expects the project to start commercial production by 2nd Quarter of calendar year 2020.
According to the notice, the backward expansion will help the company “to increase capacity utilization and economies of scale.” The company further mentioned that the project will help company in outperforming with other market players, due to a reduced cost structure.
Furthermore, the company aims to penetrate the export market in an effective and efficient manner.
The company notice also read that, “a debt equity ratio of 70:30 will be used to finance the project. The funds generated through Right Issue will be used to finance the equity portion of the project. The amount raised through the right issue will be minimum of Rs. 1.8 billion.”