Wilmar Sugar to invest Rs 800cr in Shree Renuka to pare debt

Shree Renuka Sugars today said its promoter entity Wilmar Sugar Holdings (WSH) will invest about Rs 800 crore in the company to reduce debt burden.
Singapore-based WSH had 27.24 per cent stake in debt- ridden Shree Renuka Sugars as on June 30 this year. Post issue of compulsorily convertible preference shares (CCPS), the shareholding of WSH will increase.
The investment by WSH is subject to approval of the shareholders as well as Competition Commission of India (CCI) and the oversight committee of RBI for the debt restructuring package.
In a filing to BSE, the company informed that the Board today approved issue of up to 50 crore CCPS at Rs 16.27 each to WSH.

"WSH (is) making an additional investment of Rs 783.96 crore in Shree Renuka Sugars (SRSL) for the purpose of up- front repayment and settlement of part of the debts and to fund working capital requirements of SRSL," the filing said.
The additional infusion of funds by WSH would be subject to successful completion of the debt restructuring package.

The debt restructuring includes lenders converting part of their debts into equity shares and convertible securities of Shree Renuka Sugars.
The package also includes waiver of part of the debts and restructuring of the remaining debts through rescheduling of debt payment, the filing added.

"The company hopes that this exercise, once completed, would significantly pare its debt burden and interest cost in India and would also free the company of all guarantees and obligations related to its overseas subsidiaries," Shree Renuka Sugars said.
The company, which also has presence in Brazil, had a consolidated debt of Rs 9,104 crore till March 31, 2016.
The Board also approved preferential issue of shares to lenders of the company to settle the outstanding loan.
The company proposes to issue up to 51.32 crore equity shares for Rs 835 crore, 9.35 crore redeemable preference shares for Rs 935.60 crore, 4.5 crore optionally convertible preference shares for Rs 450 crore and 5,850 non-convertible debentures for Rs 585 crore.

"The actual number of securities to be allotted would depend on the final approval of the debt restructuring scheme," the company said.
The Board also approved issue of global depository receipts (GDR) up to Rs 800 crore.
Besides, it approved increase in the authorised share capital from Rs 185 crore - comprising equity share capital of Rs 160 crore and preference share capital of Rs 25 crore - to Rs 2,515 crore.
This would be done by amending the company's Memorandum of Association, the company added.
The extra-ordinary general meeting would be held on August 24 to seek approval of shareholders.

After the announcement, the shares of the company fell 0.26 per cent to Rs 19.01 a piece at 1422 hours on BSE.