Through the present issue, the company is issuing 17.5 per cent fully convertible debentures to the existing shareholders in the ratio of 3 FCDs for every 13 equity shares held. Each FCD of Rs 100 each will be compulsorily converted into shares at the end of 17 months from the date of allotment at a price to be determined at 80 per cent of the average daily closing price on BSE during three months prior to the date of conversion.

In any case, the offer document clarifies the conversion price shall not exceed Rs 20 or be less than Rs 10. The market price is now ruling at Rs 10 on BSE. The promoters'stake, currently at 44.42 per cent, will not fall below 30.53 per cent or 27.90 per cent depending on the conversionprice.The company has managed to get bridge loans of about Rs 20 crore from IDBI and IFCI recently in addition to Rs 15.50 crore already received from ICICI in September 1998. The loans are to be repaid within a maximum period of 6 months from the date of disbursement or within 7 days of receipt of proceeds of public issue.

The rates charged by IDBI and IFCI on bridge loans sanctioned in the first week of February are different. IDBI's loan of Rs 15 crore carries an interest of 18.5 per cent plus interest tax while IFCI's loans of Rs 4.37 crore carries a rate to be worked out on the basis of PLR plus 4 per cent plus 1 per cent. As against this, the rate charged by ICICI is 19 per cent plus interest tax. The company has also been sanctioned a term loan of Rs 1 crore by the Industrial Investment Bank of India last month at a rate of 18.5 per cent. With this, IIBI's total term loan exposure to the company is at Rs 11 crore, at an average interest of 19 per cent plus.

As on January 31, 1999 the company hadspent Rs 576.96 crore on the project, now estimated to cost Rs 639.50 crore (including cost overrun). Working capital requirement for the project, appraised by Allahabad Bank at Rs 188.50 crore, has been partially tied up with Allahabad Bank sanctioning a fund-based limit of Rs 11.50 crore and non-fund based limit of Rs 30.40 crore.