Glass manufacturer Sezal Glass is raising around Rs 18 crore through issue of shares to ad-for-equity investor Bennett Coleman & Co Ltd’s arm Brand Equity Treaties Ltd. The deal will give the media firm around 6.5% stake in the small cap firm.
The company (formerly known as Sejal Architectural Glass Ltd) started off as a glass trading retail outlet two decades ago but moved into processing with a unit in Charkop and later setting up a processing unit at Silvassa.
Last month, it signed a MoU with Gujarat government on an intent to invest Rs 750 crore for its second float glass manufacturing unit at Bharuch at Jhagadia. The compoany had started manufacturing at its first glass making unit at the same location around a year ago.
According to the company’s website, its expansion plans has seen it enter into interior products retailing besides float glass manufacturing. The firm operates retail showrooms in Mumbai under Sezal Encasa brand selling home & office interior products.
This could have been a trigger point for the deal with BCCL, that keeps a particular eye for small size firms with a consumer retail business that would need to use its media vehicles for advertising. BCCL is subscribing to the fresh shares at Rs 9 a piece, a substantial premium to its current price. Sezal Glass was locked in lower circuit for the day after the price dropped 4.9% to Rs 4.08 at BSE in early trading hours on Friday, after the company disclosed the preferential allotment plan.
For the quarter ended September’10, the firm’s revenue stood at Rs 83 crore with net loss of Rs 20.8 crore largely due to interest cost of Rs 19 crore and depreciation cost of Rs 12 crore. It could use the money from BCCL to part pay the debt and partly to secure media advertising space for its retail operations.