Financials - FCCB -31 May 2006

Kanoria Chemicals raises US$20 million through FCCBs

New Delhi, May 31, 2006: Kanoria Chemicals & Industries Limited announces the successful raising of US$20 million through Zero coupon Foreign Currency Convertible Bonds. The Bonds will be convertible into equity shares at a conversion price of INR 160.00 which represents a 51.73% premium to the NSE closing price of INR 105.45 as on 30th May, 2006. The bonds have tenure of 5 year 1 week and bear a yield-to-maturity of 7.5%.

Silverdale Services Limited, London was the Sole Lead Manager for the offering.

The money raised will be utilised to fund inter alia expansion of Chlor Alkali capacity with simultaneous expansion in capacities of various chlorinated derivatives.

R. V. Kanoria, Chairman and Managing Director of Kanoria Chemicals & Industries Limited said: "We are pleased that global investors have recognized the potential of our Company and its excellent growth prospects. This has enabled us to raise monies at significant premium over our current share price. The commissioning of additional 25MW power project in December 2005 and 40,000 TPA Caustic Soda plant in April 2006 has boosted the fundamentals of the Company. With this funding, KCI is fully equipped to implement its next phase of expansion."

Sanjay Guglani, Managing Director of Silverdale Services said: "We are delighted at the confidence of quality global investors in Kanoria Chemicals convertible bond issuance. Despite tremulous market conditions, the Company has been able to attract savvy global investors. We, at Silverdale, are proud to be associated with the issuance as sole Lead Manager."

Kanoria Chemicals & Industries (KCI) is a leading manufacturer of Chlor-alkali and Alco-chemical based intermediates with a portfolio comprises of over 15 products. Emerging as a market leader in three and with substantial market share in all others, it is ISO 9001, ISO 14001 and OHSAS 18001 certified besides being rated a 'CRISIL GVC Level 3' for its strong capability with respect to wealth creation for all its stakeholders while adopting sound corporate governance practices.