Spanco Ltd has announced that its plans to raise Rs 50 crore through issue of of fresh securities. The company plans to raise Rs 30 crore through preferential allotment to investors including promoters, private bodies corporate or institutional investors, it informed the Bombay Stock Exchange. It plans to raise another Rs 20 crore through a rights issue to existing shareholders.
The company will now seek the permission of shareholders at an Extra-ordinary meeting on how to proceed with the issue.
Spanco is involved in two lines of businesses - telecom integration and business process outsourcing (BPO). The telecom segment is engaged in the providing solutions in the telecom system integration domain, including network engineering services and software sales. The BPO services focuses on international call center operations.
Spanco raised Rs 122 crore from private equity firms ChrysCapital and UTI Ventures in early 2007. While ChrysCapital picked a 14.92% through its subsidiary Monet Ltd, UTI Ventures picked up a 5.3% stake. If ChrysCapital participates in the rights offer, then its shareholding may go up by more than 15%, which might trigger an automatic open offer for another 20% stake. Another PE investor in the company is Argonaut Ventures, which has a little less than 5% stake.
ChrysCapital, UTI Venture Down By More Than 85% In Spanco
The private equity firms bought their stake in March 2007 at a price of Rs 215 per share. Spanco's closing price at close of markets today was Rs 29.45, up by 1.55%. The investment from ChrysCapital and UTI Ventures is currently at down by 86.3%. The similar is true for many of the PIPE (private investments in public equity) deals done during the bull markets in 2007, when valuations were peaking.
The Spanco stock touched a low of Rs 15.25 last month, before the bull rally started. Its high in the last six months has been around Rs 41 per share.