Jaypee Development Corporation will launch an open offer for acquisition of 7.63 crore shares

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of Andhra Cements at Rs 12 apiece tomorrow.

Existing shareholders of the cement-maker would be able to tender their shares by February 8, Andhra Cements said in a communique to the shareholders.

Jaypee Development Corporation had inked an agreement with a clutch of Andhra Cement promoters/promoter group firms on November 15 to acquire 19.65 crore equity shares, or 66.64 per cent of the expanded paid-up share capital of the company. This includes 4.81 crore shares from the promoter/promoter group firms.

Andhra Cement's shares are listed on the BSE and National Stock Exchange (NSE), but the NSE suspended trading in the shares with effect from November 3 due to non-compliance with certain provisions of the listing agreement.

The company was referred to the Board for Industrial and Financial Reconstruction (BIFR) in January last year. However, its liquidity crunch continued. Its production was discontinued for want of raw material and power supply was also discontinued to its factory.

During the 15 months ending June, 2011, the company suffered a Rs 24.6 crore loss.

In order to overcome the liquidity crisis and revive operations, the company required the infusion of substantial capital. However, it could not raise the funds through further borrowings as it had already Rs 450 crore debt as of June-end.

"Hence, for revival of the company, infusion of further equity capital could be the only option. However, promoters were not in a position to infuse any further funds into the company," Andhra Cements said in the statement.

Andhra Cements' scrips closed at Rs 11.86 apiece on the BSE today, up 2.51 per cent from their previous close.