Reliance Hikes Open Offer For
The Reliance group yesterday made an open offer through Silvassa Yarn and Investments Ltd (SYIL), a business associate, to acquire 20 per cent of the issued fully paid-up capital of Raymond Synthetics Ltd (RSL) at Rs 5.15 per share. The 20 per cent will constitute 2.48 crore paid-up equity shares of RSL.
The offer price of Rs 5.15 is higher than the average of the weekly high and low of the closing prices of Raymond Synthetics Ltd at the National Stock Exchange (NSE). SBI Capital markets is the lead manager to the issue.
On Monday, Reliance announced its plan to buy the entire stake of Raymond Ltd in RSL, which amounted to 36.15 per cent of the company's equity. The
Rs 22 crore deal is being executed by SYIL at Rs 5 per share.
The takeover is subject to the condition that RSL obtains necessary clearance from banks and financial institutions on its outstanding debt. RSL has an outstanding debt of about Rs 412 crore to various banks and financial institutions.
Besides the Rs 22 crore for acquiring equity capital of RSL, Reliance group has agreed to pay Rs 130 crore to Raymond Ltd over a period of time for acquiring the former's synthetic division.
Raymond has been making losses due to pricing pressures and an unwieldy debt burden. While its accumulated losses amount to Rs 89.3 crore, it has a debt burden of Rs 412 crore and interest burden of Rs 48 crore.