Kolkata , June 26

The Bihar-based Riga Sugar Co Ltd is giving final touches to its plans for raising Rs 35 crore through the GDR (global depository receipts) route for funding its expansion programme.

According to sources, Riga Sugar has tied up with the London-based merchant banker, Elara Capital Services Ltd, for this purpose. Riga Sugar will be making a private placement.

The company would seek an approval from the shareholders at its extra-ordinary general meeting (EGM) scheduled on July 14. The issue is likely to be completed within a month or two after the EGM.

However, to what extent the promoters would be diluting its stake is not known. Currently, Mr O.P. Dhanuka, Chairman and Managing Director of the company, holds approximately 55 per cent in the company.

Riga Sugar's plant is located at Sitamarhi district of Bihar. Its current capacity is 2,500 tonnes crushed per day (tcd). In the first phase, the capacity will be increased to 4,200 tcd and will go on-stream by November. Work on the expansion programme has begun and orders for the machinery has already been placed.

In the second phase, the capacity will be further increased to 5,000 tcd. Capacity of the bagasse-based co-generation power plant will be increased from 7 MW to 19 MW in 2007-08. Of it, the plant will use around 12 MW and the rest will be sold to the grid.

Riga Sugar is also setting up an ethanol plant of 45 kilo litres per day (klpd) capacity and an extra neutral alcohol plant of 25 klpd capacity. The distillery would be situated in the same location and would be ready by the end of 2006.

For the half-year ended March 31, 2006, Riga Sugar registered a total income of Rs 60.22 crore as against Rs 47.86 crore in the previous year. Net profit jumped to Rs 9.02 crore from Rs 3.50 crore.

For the accounting year ending September 30, 2005, it recorded total sales of Rs 76.5 crore against Rs 60.1 crore in the previous year. Net profit increased marginally to Rs 2.47 crore from Rs 2.02 crore.