MUMBAI (Commodity Online): Uttam Sugar Mills Ltd (BOM: 532729) has sought an approval from the market regulator, Securities and Exchange Board of India (SEBI) for 4.3 million 1-for-6 rights issue of Rs.10 each along with two detachable warrants.

The rights issue is being made to fund partial repayment of long-term loans from promoters, banks and the Sugar Development Fund, according to the offer document posted on the market regulator's website on Tuesday.

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The first warrant will be exercisable at Rs.60 each between 15 and 18 months from allotment date. The second will be exercised at 15% discount to its market price at the time of conversion between 27 and 30 months from the allotment date.

The Uttarakhand-based sugar company has a high debt-equity ratio of 3.55 as on March 31, 2009. However, the company attributed the high debt-equity ratio to its capacity expansions, high input costs and depressed market conditions.

The stocks of Uttam Sugar Ltd closed at Rs.63.00 down by 1.4% on Bombay Stock Exchange on Tuesday.

During the fiscal year ended September 30, 2007, the Company crushed 216.72 lakh quintiles of cane and produced 21.35 lakh quintiles of sugar.

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