The additional loans advanced to part finance its expansion project include a medium-term working capital loan of Rs 25 crore and financial assistance under the equipment finance scheme of Rs 25 crore from the Industrial Investment Bank of India, a rupee term loan of Rs 22 crore from Industrial Credit & Investment Corporation of India and a foreign currency loan of $3 million (about Rs 12 crore) from State Bank of India.

In addition, the company raised during the year Rs 60 crore from a private placement of 15 per cent non-convertible debentures to various financial institutions and mutual funds.

The company's project for expansion of paperboard capacity from 90,000 tonnes to over 200,000 tonnes was commissioned in April at afinal cost of Rs 675 crore against the previous cost estimate of Rs 574 crore. The increased cost includes impact of "increased automation, expanded civil construction, higher cost of capital goods import due to depreciation of the rupee and time overrun."

The company is also getting assistance from ITC and its investment subsidiaries amounting to Rs 150 crore. Out of this, Rs 25.72 crore will come against allotment of 11 per cent redeemable cumulative preference shares of Rs 100 each, redeemable at par in seven years. The balance will be against allotment of equity shares of Rs 10 each at a premium of Rs 55. Incidentally, under SEBI's formula , the issue price works out to only Rs 34.

If the preferential issue of ITC-BPL is made without any modifications, the stake of ITC and associates in the company would increase from 37 per cent to 51 per cent while the holding of financial institutions, banks, mutual funds and insurance companies would collectively be reduced from 38 per cent to 30 per cent.

Inaddition, the public float and the FII holdings would get diluted to 17 per cent and 2 per cent respectively. Currently, the public holding is 22 per cent while the FIIs have a 3 per cent stake.