CEAT to raise ₹500 cr via NCDs, infuse ₹400 cr into Sri Lanka unit

CEAT will raise Rs 500 crore through NCDs for capex and debt repayment and invest Rs 400 crore in its Sri Lankan unit to fund the Camso brand acquisition

CEAT on Wednesday announced its plans to raise up to Rs 500 crore through the issuance of unsecured non-convertible debentures (NCDs) on a private placement basis. The company’s Finance and Banking Committee approved the proposal at a meeting held on June 25.

 

The NCDs will carry a fixed interest rate, determined via bidding on the NSE’s Electronic Book Provider (EBP) platform. The instruments will have a tenure not exceeding five years, with annual interest payments and bullet repayment of principal at maturity. The proceeds will be used for ongoing capital expenditure, repayment or replacement of high-cost debt, and working capital requirements. This issuance is in addition to the Rs 250 crore in NCDs already raised earlier. 

 

CEAT also plans to infuse up to Rs 400 crore (equivalent in Sri Lankan rupees) into its wholly owned subsidiary, CEAT OHT Lanka, in one or more tranches through equity and/or preference shares. The capital will partly fund the previously announced acquisition of the Camso brand’s off-highway construction equipment tyre and tracks business. The subsidiary, incorporated in Sri Lanka, is yet to commence commercial operations.

 

In a separate move, the company’s board also approved availing of credit facilities of up to Rs 1,000 crore in one or more tranches for business purposes.