Bodal Chemicals to merge Milestone Organics, raise funds through Rights Issue

Bodal Chemicals Ltd has announced about the following:

A. Amalgamation of Milestone Organics Ltd, Padra, Baroda

The Board of Directors in its meeting held on June 16, 2007 had approved the scheme of Amalgamation of M/s. Milestone Organic Ltd. (MOL) with the Company subject to necessary approval from shareholders, Hon"ble High Court of Gujarat and other relevant authorities. The salient features are as under:

1. The appointed date is January 01, 2007.

2. The Company will allot / issue 1 Equity share of Rs 10/- each credited as fully paid-up for every 75 equity share of Rs 10/- each fully paid-up held by the members of MOL. The shares to be issued shall be pari passu in all respects including for dividend with the existing equity shares of the Company.

The Company will have benefit of carried forward losses of MOL which will have sizeable tax saving benefits for the Company. Further fuller and better utilization of production capacities of MOL plant which hitherto was barely running will add sizeable turnover and profits to the amalgamated entity. These are several other synergies in operations will add up to increase shareholders investment value in the Company.

B. Bodal"s Right Issue - Offer Document filed with SEBI :

The Company also have filed a Draft letter of Offer for right issue with warrants which can be exchanged against shares, aggregating to Rs 20.80 crores. The equity share will be issued under right issue and against warrant at Rs 10/- premium for a face value of Rs 10/- per equity share. The Draft Letter of Offer can be send on SEBI website for further details.

C. New Project Commissioned at Padra, near Baroda :

The Company has successfully commissioned its Rs 36.00 crores project covering 3,000 mtpa plant to manufacture H Acid ahead of its schedule, on June 15, 2007. Another plant to manufacture 6000 mtpa Vinyl Sulphone is expected to start by first week of July 2007. These plants were originally expected to be complete by October 2007. The full year production is expected to add Rs 150 crores in turnover of the Company and net profitability of the entire operations of the Company is expected to improve to the range of 5.5% to 6% from current 4.5%.

D. Further projects on drawing Board of Bodal:

The Company is contemplating a further project at Padra, Baroda itself for a 1000 mt per month Dyes manufacturing unit at a very preliminary investment of Rs 25 crores and intends to complete the project, once finalized, during April-June 2008. This with existing Dyes manufacturing capacities of the Company of 500 mt per month, will make the Company, the largest Dyes Manufacturing Capacity holding Company in India.

Source : Equity Bulls

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