McNally Bharat Engineering Co Ltd (MBE) on Friday decided to make fresh equity issue worth Rs 250 crore including premium. The Board of the B M Khaitan group company also decided raise the authorised capital from the present Rs 160 crore to Rs 195 crore. The current paid up capital of the company stands at Rs 40.84 crore.

Amritansu Khaitan, director of the company told Business Line that the Board has taken an enabling resolution.

The exact equity fund raising route would be identified within fortnight talking to merchant bankers, said MBE Wholetime Director Prabir Ghosh. “The issue route would determine the time”, he said.

The company intended to raise the fund by the end of July, he added.

According to merchant banking sources, private placement is one the quickest way raise equity funding. Promoters currently hold 38.28 per cent of the paid up equity. However, promoters have pledged shares worth 17.13 per cent of the company. The combined holding of mutual funds, entities and high net worth investors’ including Rakesh Jhunjhunwala stands at 22.94 per cent.

Q4 loss Rs 5.68 cr

The company reported a net loss of Rs 5.68 crore in the fourth quarter against a net profit of Rs 15.91 crore. The full year’s net loss was placed at Rs 72.49 crore against Rs 38.63 crore owing to a contingency provisioning of Rs 75 crore on delayed projects and higher finance cost (Rs 5.88 crore).

Top line was flat. The execution of the company suffered due to shortage of working capital as the company faced large amount of unpaid retention money and payment arrears. Most of the fresh major orders that had been received during H2 of last year will reach billing phase only in Q4 of this financial year, while the major jobs were near completion. The order book at the end of the year stood at Rs 4,164 crore.

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