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Wilmar raises stake in Renuka Sugars to 38%

Firm to invest of Rs 784 cr in the debt-ridden company

Dilip Kumar Jha  |  Mumbai 

Photo: Shutterstock

Faced with interest cost wiping out the entire profit and turning the company into the red for the past four years, the promoters of integrated manufacturer (SRSL) have divested a part of their stake to Holdings Pvt Ltd (WSH),

In 2014, WSH had acquired 27.22 per cent, half of the promoters’ then stake in SRSL, for $200 million (Rs 1,200 crore) in 2014. SRSL has announced a preferential issue of up to 500 million 0.01 per cent compulsorily Convertible Preference Shares (CCPS) of Rs 16.27 each at par to WSH, at an investment of Rs 784 crore. 

Narendra Murkumbi, managing director, said in an interview that the issuance of CCPS was a part of the company’s exercise, agreed to by its After their conversion upon full divestment of stake, WSH’s stake in the company would go up to 38 per cent, with that of banks between 25 and 27 per cent. The promoters’ (Murkumbi family’s) stake would decline to 13 per cent.

Conversion of CCPS, however, would trigger an open offer of equity in SRSL. 

“As part of the plan, WSH is making an additional investment in SRSL for the purpose of upfront repayment and settlement of part of the and to fund working capital requirements. Also, as a part of restructuring, are converting part of the into equity shares and convertible securities of SRSL. Also, the would include waiver of part of the and of the remaining through changes in the repayment terms, on the terms of a package,” SRSL said.

Completion of the issue is subject to fulfilment of conditions laid down in the subscription agreement. Such as receipt of approval from the shareholders, the Reserve Bank of India’s Oversight Committee on the package, and anti-trust clearances from the relevant competition authorities, the company added.

“Through this restructuring, our aim is to turn the company profitable as soon as possible,” Murkumbi said.

Annual interest outgo would decline by half to Rs 200 crore after the restructuring, from the existing Rs 400 crore. SRSL’s standalone would significantly come down to Rs 1,500 crore, in addition to Rs 500-odd crore of one per cent debentures, from the existing Rs 3,700 crore.

SRSL posted its sharpest standalone net loss of Rs 466 crore for financial year 2014, on a turnover of Rs 6,522 crore. Its consolidated net loss was Rs 1,813 crore for FY14. The consolidated loss declined to Rs 1,040 crore for FY17, on turnover of Rs 11,844 crore.

The company’s legal advisors are Crawford Bayley & Co and Khaitan & Co, with IMAP as the financial advisor. Edelweiss Financial Services was the sole financial advisor for Wilmar, with legal advice from Trilegal. IDBI Capital Market Services acted as advisor to the banks.


First Published: Sat, July 29 2017. 00:35 IST