ICICI Ventures-backed Delta Corp is raising Rs 285.48 crore through issue of equity convertible warrants to a group of unnamed investors. The company that was originally a textile firm had over the last two years undergone a business restructuring whereby it has become a hospitality and real estate player by demerging textile business to Arrow Textiles.
The largest shareholder of Delta Corp is Zia Jaydev Mody (one of the top corporate lawyers of the country and daughter of Soli Sorabjee) who is married to Jaydev Mody who in turn is related to the Piramals and has been engaged in real estate sector.
The company proposes to issue warrants at Rs 51 per share, a sharp discount to the current market price of Rs 70. However, the proposed issue is in line with recent price as the scrip has shot up 76% over the last one month.
The company’s board has also approved further allotment of securities worth Rs 39.45 crore to ICICI Venture as a pre-emption right under the terms of the Investment Agreement signed in February 2008. ICICI Venture has a pre-emption right in respect of any fresh issuance of securities, to subscribe such further securities so as to maintain its shareholding in Delta Corp.
ICICI Venture bought 14.99% in Delta(then Arrow Webtex) for Rs 82 crore at a price of Rs 40.5 per share. Its holding has since then whittled down to 12.15% due to subsequent issues. Other investors who have entered the company include New Vernon and BCCL (through Brand Equity Treaties Ltd) who hold 1.2% and 2.2% respectively. These investors apparently subscribed to shares at Rs 50 per share one year ago.
Delta Corp owns two offshore Casinos in Goa-- Casino Royale and King’s Casino. It also owns a large minority stake in Advani Hotels & Resorts that in turn owns Ramada Caravela Beach Resort and also operates offshore Casino Goa onboard MV Caravela.
The company that closed last fiscal ended March’10 with revenues of Rs 132 crore and net profit of Rs 12 crore has a market cap of around Rs 1,170 crore ($255 million).