Renuka Sugars to sell fresh shares to Wilmar Int for Rs 517cr

Leading sugar firm Shree Renuka Sugars today said it will sell 25.75 crore fresh equity shares to Singapore-based agri-business firm Wilmar International for Rs 517 crore in order to reduce the company's debt.
The company's board of directors today approved issue and allotment of up to 25,74,91,592 equity shares for a price of Rs 20.08 per share aggregating to Rs 517.04 crore to Wilmar Sugar Holdings Pte Ltd on preferential basis, Renuka Sugars said in a filing to the BSE.
Renuka Sugars said it has entered into an agreement with Wilmar International through its subsidiary Wilmar Sugar Holdings (WSH), to facilitate the "investment of about USD 200 million" in the primary capital of the company.

Renuka said the deal would be done in two steps. First, WSH would invest up to Rs 517 crore in the company through a preferential allotment of fresh equity.
"After this preferential issue, the existing promoters and WSH would hold 27.5 per cent of Renuka Sugars' expanded equity share capital," the statement said.
At present, promoters hold 38.36 per cent stake in the company.

Renuka said there would be an open offer by Wilmar Sugar Holdings and the existing promoters for up to 26 per cent of the expanded share capital at Rs 21.89 per share.
"The second step would involve Wilmar and the existing promoters of Renuka Sugars jointly participating in a rights issue to raise upto a further Rs 725.4 crore of primary equity capital for Shree Renuka Sugars," the statement said.

Under a joint venture agreement signed between existing promoters, WSH and the company, Renuka Sugars would be jointly controlled by the existing promoters and Wilmar with both companies holding equal stakes and board representation.
The existing promoters would continue with the management of the company with Wilmar being actively involved in strategic decisions.
The investment is subject to approval of shareholders, anti-trust clearances in India and Brazil and such other statutory clearances as may be deemed necessary.
The proceeds of this investment/fund-raising would be used to pay down existing debt of Renuka Sugars in India.
"As a strategic shareholder, WSH's shareholding in Renuka Sugars and the capital infusion will strengthen the company's financial and business position and also provide a further platform for growth. Wilmar's global reach and strong presence in key sugar producing countries is complementary to Shree Renuka's business," the statement said.