Berger Paints allots 2 crore warrants

Kolkata: Berger Paints India (BPI) has allotted 2 crore equity warrants to Jenson & Nicholson (Asia), a part of the promoter group of BPI, for Rs 9.9 crore and these are convertible into equity shares of Rs 2 each within 18 months.

The warrants were issued for Rs 49.50 each, which is more than the price determined under the Securities and Exchange Board of India (Sebi) guidelines 2000, and represent a premium of about Rs 9 over the current market price, said a company press release. Once fully paid, the company will receive an amount of Rs 99 crore.

BPI will use the money to fund its organic and inorganic growth plans. The transaction pertaining to the recently acquired Polish paints company Bolix was expected to be completed within two months and was being funded by a bridge loan, said Srijit Dasgupta, vice president, finance, BPI.

The money could be used to write off the loan. It would also fund the upcoming automotive coating plant at Jejuri near Pune and other capex projects. The 750 kilolitre per month (klpm) plant was expected to go onstream by December 2009, with an investment of Rs 55 crore.

Berger Paints has undertaken modernisation and expansion activities at its Goa and Rishra plants, besides expanding the facilities at Gujarat and Jammu, at a net capex of Rs 100 crore by June 2009.

The company recently hinted at a price increase across the solvent-based decorative paints segment with effect from June 1. The prices will rise by 10 per cent on an average.