Praj will allot to Khosla 16,22,250 equity shares of Rs 2 each at a for Rs 120.25 per share and 6,489,000 warrants which are convertible into equity shares of Rs 2 each within 18 months at Rs 120.25 per warrant. Marubeni Corporation will be alloted 8,11,125 equity shares of Rs 2 each at Rs 120.25 each.
Praj Chairman Pramod Chaudhari said Khosla were taking a keen interest in developing ethanol industry in United States while Marubeni Corporation has interest in turnkey Projects, ethanol trading and investment in ethanol plants.
Promoters and directors of the company have also agreed to participate in the preferential issue of equity shares to the extent of 8,11,125 warrants which are convertible into equity shares of Rs 2 each within the statutory period of 18 months.
Chaudhari said the objective of the preferential issue is to raise resources for substantially expanding the R&D facilities of the Company as also to facilitate the entry of investors of repute like Vinod Khosla who is currently spearheading a campaign in the US to promote enhanced use of ethanol, and to establish closer links with one of the world's top conglomerates, Marubeni Corporation.
To facilitate the investments from Khosla and Marubeni, the company's authorised capital will be increased from Rs 18 crore to Rs 27 crore. The company will seek shareholder approval to these decisions in an extra ordinary general meeting, which will be held May 2, 2006.
