|Vinod Khosla buys 10% stake in Praj IndustriesAdd to Clippings|
[ Saturday, April 08, 2006 12:03:59 amTIMES NEWS NETWORK ]
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MUMBAI: Vinod Khosla, former Sun Micro Systems co-founder turned venture capitalist, has found his call in India. A silicon valley billionaire, who is now promoting ethanol fuel across the globe, on Friday, signed an agreement with Pune-based Praj Industries to acquire up to 10% stake in the company.
Khosla's company, Kleiner, Perkins, Caufield & Buyers will buy stake in the distillery equipment maker by subscribing to the preferential shares and convertible warrants for Rs 117.1 crore at Rs 125.2 per share.
The warrants will be converted into equity shares after 18 months, once it receives shareholder approval slated to be called on May 2. The acquired price is a 20% discount to BSE's closing price of Rs 157.
Praj Industries proposes to issue 2.4 million fully paid-up equity shares and 7.3 million warrants to Khosla, the company informed the BSE.
Why is Khosla picking up stake in Praj? Buoyed by the success of the Brazilian experience of using ethanol as a substitute to petrol, Khosla has already invested millions of dollars in private companies that are developing methods to produce ethanol using plant sources other than corn.
Recently at an international conference on alternate fuels, he said, "I am convinced we can replace a majority of petroleum used for cars and light trucks with ethanol within 25 years."
The upside for his investment could come from two reasons. Worldwide there is a demand to reduce the dependence on petrol by mixing ethanol with petrol. Secondly, the popularity for ethanol-based equipment is growing quickly.
Praj will be utilising these funds for research and development purposes. The company has recently forged an alliance with Aker Kvaerner Netherlands BV for a strategic cooperation on bio-ethanol projects in Europe. As per the memorandum of understanding, the companies will unite their expertise to jointly pursue business opportunities.