Gensol Engineering to raise Rs 600 cr via FCCBs, promoter warrants

Gensol Engineering on Thursday announced plans to raise Rs 600 crore through the issuance of foreign currency convertible bonds and warrants.

The move aims at achieving sustainable growth, reducing debt, and maximising value for its stakeholders, the company said in an exchange filing.

The Board of Directors, in its meeting held earlier today, has approved fundraising initiatives amounting to Rs 600 crore, aimed at significantly enhancing its financial standing, the company said.

While Rs 400 crore will be raised through the issuance of Foreign Currency Convertible Bonds (FCCBs), and Rs 200 crore by issuing warrants to promoters.

Currently, Gensol Engineering has a debt of Rs 1,146 crore against reserves of Rs 589 crore, resulting in a debt-equity ratio of 1.95.

After the Rs 600 crore fundraise, the company's reserves are expected to increase to approximately Rs 1,200 crore.

With Rs 615 crore of divestments underway, the company's debt will be reduced to approximately Rs 530 crore.

Gensol Engineering Managing Director Anmol Singh Jaggi, "Our foremost priority is to strengthen Gensol's balance sheet, and we are taking bold and decisive steps to address it starting with this fund-raise".

This Rs 600 crore fundraise, coupled with the strategic divestments, will be crucial in strengthening and positioning the company for sustained growth, he said.

In a separate filing, the company clarified "that the issuance of promoter warrants is happening at Rs 56 per share of Re 1 face value, which is equivalent to Rs 560 per share of Rs 10 face value, considering the 10:1 stock split approved by the Board".

The company further said that "at Rs 56 per Re 1 face value share, the pricing represents a 213 per cent premium over the current market price of Rs 262 per share (Rs 10 face value adjusted)".