BILT Paper to raise $330m through share sale in London
23 March 2011
Billionaire Gautam Thapar's BILT Paper Plc plans to raise about $330 million by selling shares in London. It will use the proceeds to reduce debt and expand its paper mills in the South Asian nation.
The company will use $140 million to repay debt and about $170 million to enhance capacity, BILT said in a statement to the London Stock Exchange on Tuesday. The news sent up the shares of Ballarpur Industries Ltd, India's biggest paper maker, which controls BILT.
Economic growth is raising literacy levels in the world's second-most populated nation where 65 per cent of the country's 1.2 billion people can read and write, according to the 2001 census, adding to demand for BILT's products.
Growth in demand for paper in India may exceed that of China this decade, rising 5.5 per cent every year, BILT said in the statement.
''This growth in demand, which is closely correlated to growth in GDP and disposable income, has already led us to significantly expand our production,'' chairman R R Vederah said in the statement.
The share sale will reduce the founders' holding in the company by at least 25 per cent, B Hariharan, director at parent Ballarpur, said in a conference call with reporters.
BILT Paper will get listed in London by 20 April, he said.
''The idea of choosing London is to attract a new set of investors from the UK and other developed markets,'' Ballarpur Industries chief executive officer Yogesh Agarwal said on the conference call.