Company sources said the shares, having a face value of Rs 100 each, are being issued to meet the company's working-capital requirements. The company has not decided on the rate of interest and dividend, or the terms of redemption of the shares.

Subsequent to the issue, DCM Shriram's authorised capital will go up to Rs 105 crore from Rs 75 crore. The company's paid-up equity capital is Rs 16.75 crore.

This would be the company's second move to dilute its equity to meet working capital requirements. The company had recently issued 16 per cent secured redeemable non-convertible debentures of the face value of Rs 15 crore through private placement to financial institutions.

DCM Shriram had also mortgaged some immovable property in Rajasthan and Gujarat with the Industrial Finance Corporation of India to avail of a Rs 24-crore term-loan.

The company intends to seekits shareholders' approval for issuing the preference shares at its annual general meeting on July 28. It also plans to seek shareholders' approval to reappoint vice-chairman and managing director Ajay Shriram for a five-year period from November 1, 1998. Approval will also be sought to reappoint Vikram Shriram, the joint managing director, for another five-year period from November 1.

DCM Shriram Consolidated comprises Shriram Fertiliser and Chemicals and Shriram Cement Works at Kota and Shriram Alkali and Chemicals in Bharuch, Gujarat.The company's net profit had plunged more than 50 per cent to Rs 23.97 crore despite a higher turnover of Rs 697.63 crore during the year ended March 1998.

The turnover in 1996-97 was Rs 620.91 crore with a net profit of Rs 48.81 crore. Operating profit, however, moved up to Rs 100.4 crore from Rs 92.3 crore, an 8.7 per cent increase.The company proposes to kick-off an internal restructuring to shore up its bottomline.

The efforts are being directed towards streamliningthe cost-structure, overheads, energy savings, information technology and creating new value-added businesses, sources said.

A recessionary trend in the industry is one of the reasons for the company's decision to concentrate more on upgrading the existing product line than going in for new products, they added.