The stock had bounced back from the lower level since mid-December 2005. From a low of Rs 25.80 on 15 December 2005, the stock jumped 48% to Rs 38.20 by 13 January 2006.

Saurashtra Cement's board has approved issue of convertible debentures and equity warrants on a preferential allotment basis aggregating Rs 105 crore. The issue will be made to three entities viz. ADM Maculus Funds II LP (Cayman Islands), Toro Managers (British Islands), and Brescon Corporate Advisors.

Saurashtra Cement (SCL) may use the funds raised from the preferential issue to pre-pay the debt to financial institutions and banks. Last month, financial institutions had approved the company's debt restructuring package, including the partial remission of interest, other charges, reduction in interest rates, rescheduling of repayments and option to lenders for partial conversion of debt into equity.

Saurashtra Cement carries huge debts. As on 30 June 2005, these aggregate Rs 368.94 crore, of which interest paid itself amounted to a whopping Rs 45.18 crore.

Saurashtra Cement is one of the prominent cement players in the Gujarat market. The company has a production capacity of 1.3 million tonnes per annum and it is in the process of enhancing it to 1.5 million tonnes. SCL markets its cement under the `Hathi' brand.