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Gati Corporation has approved
an issue of 15.71 lakh shares at Rs 423 per share to AMP Cap
investors. The company is looking to raise almost $43 million.
The company, according to its Managing Director, Mr Mahendra
Agarwal, has a plan of putting in $100 million in the next
three years.
Excerpts from CNBC-TV18's
exclusive interview.
How much money are you
looking to raise? Are you going to be using this for expansion?
We are looking at raising almost $43 million. We have
also raised some money through rights issue, which was done
about six months ago. In the next three years, we are going
to put in $100 million in the company, in addition to $25-
30 million that we have already put in the last couple of
years.
Half of this money will come through
equity. The balance would come through internal accruals. We
are putting all this money to enhance the capability of the
company. What are the plans to use the route of equity to raise
this cash?
About $15 million has already come from AMP
investment. Another $3 million is going to come through the
convertible warrants and $20 million through FCCBs. In the EGM,
we have already passed the resolution. By next month, this $20
million should come through FCCB. Another $5 million will come
from the promoters. We have already raised the balance through
the rights issue.
What are your plans to ease your debt
interest?
With AMP investment we have already become
a debt-free company. This year, we are going to close almost
at Rs 400 crore without looking at our fuel station, which
brings in about Rs 80 crore. We have already passed a resolution
in the EGM that fuel stations will be hived off into its own
subsidiary. This Rs 400 crore will go up to Rs 1,000 crore
in the next three years. In June 2009, Gati will be a 20-year-old
company.
What will be the total equity dilution?
What kind of EPS can we expect from Gati in June FY06?
The EPS will be almost Rs 18. Last year,
it was Rs 17. So we are looking at an EPS more than that,
despite the dilution. When the FCCB gets converted in the
future, the total dilution would be almost about 20-22 per
cent and the promoters' holding at that time would come down
to almost 45 per cent. But we don't expect the EPS to go down.
Further, we are expecting the bottomline to almost double
than the topline growth.
There was a talk of foreign partnership
with TNT. How open are you to that? Are you in conversation
with companies?
We were and are not in conversation with
any company. Gati is a truly Indian multinational. It is on
a very strong footing. It is a leader in express distribution
and supply chain solution. With the infusion of this fund,
we are going to enhance our capability and are going to create
a world-class facility in terms of warehousing.
How soon does the fuel station get
hived off into a separate entity?
That will happen in the next two-three
months.
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