The Rs 16.28-crore rights float has been priced at par, below the prevailing market price, and the overseas parent has committed to pick up the unsubscribed portion which may rake up Electrolux's stake in the venture to 74.21 per cent. AB Electrolux currently holds 51 per cent in the venture. The rights issue will enhance the company's share capital to Rs 32.55 crore.

Washing machine-maker Intron has also decided to enter into a registered- user agreement with AB Electrolux, following which the company will make an application to the Registrar of Trademarks seeking registration of the user agreement.

The company will issue 1,62,75,510 shares to its existing shareholders at face value of Rs 10, although the scrip is quoting far below par value. The issueproceeds will be deployed to meet the company's working-capital requirements, which has been estimated at Rs 20 crore.

The company is plagued with huge accumulated losses running up to Rs 24.26 crore as on March 31, 1997, far in excess of its net worth, which is slated to inflate to Rs 28.97 crore in 1997-98. Total shareholders funds (including a revaluation reserve of Rs 9.44 crore) aggregate to Rs 25.71 crore.

The company's debt-equity ratio at 5:1 is expected to deteriorate further after the issue owing to adjustment of accumulated losses of the company from shareholders' funds, while computing the net worth component of the debt-equity breakup.

Intron has said, in its draft prospectus, that poor financials are primarily owing to the import-intensive nature of its business, which has been adversely hit by "stiff" import duties. Coupled with a very low capacity utilisation, high customs duty has hiked the cost of production. The 1997-98 budget proposal to impose an additional 4 per cent duty maycompound its woes further.

With accumulated losses outstripping its net worth, Intron had sought a reference to the BIFR way back in 1995, but the application was rejected as the company had not completed five years of commercial production. A similar application was rejected last year by the board, as the number of workers employed at Intron was less than the statutory requirement of 50 workmen.

However, according to the company, operations have started stabilising and brand promotion received a fillip after AB Electrolux entered as a principal shareholder. The Swedish giant provides engineering and technological support for its range of automatic and programmable washing machines, among others.

Maharaja plan hit

Maharaja International, the Indian flagship of the AB Electrolux group, has failed to meet the deadline for completion of its Rs 50-crore expansion project. The capacity expansion, increasing its refrigerator manufacturing capacity from 2.5 lakh units to 4 lakh units per annum, hasfaced a time overrun and the completion has been resheduled to September 1998, from earlier projections of December 1997. The company had mopped up Rs 34.16 crore, through a rights issue, to fund its capacity expansion, which has been executed partially to hike the annual production capacity to 3.5 lakh units.