Gas cylinder maker Everest Kanto Cylinder Ltd is raising around Rs 81 crore ($17 million) through a preferential allotment of shares to two separate mutual fund schemes of Reliance Capital.

Reliance Growth Fund will pick around 4 million shares while Reliance Regular Savings Fund - Equity Option will subscribe to around 2 million shares. The two funds will together pick around 5.6% of the expanded capital base of the firm. The shares will be issued at Rs 135 a piece around 4% premium to the market price of Rs 131.

The proceeds of the proposed preferential offer will be utilised for capital expenditure, working capital and repayment of debt.

The company that reported around 69% drop in consolidated net profit for the year ended March’10 over the year ago period is looking to commission two new plants in Gujarat this year. It has spent Rs 185 crore in the two plants and is expected to spend another Rs 30 crore in one of the units.

The firm counts among its investors Beacon India and New Vernon who held around 1.5% each as of March 31. Promoters own close to 59% of the firm.

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