Cooling products maker Blue Star on Thursday said it will raise Rs 300 crore through issuing non-convertible debentures (NCDs) to meet its capital expenditure and other expenses after the lockdown.
The nationwide lockdown has impacted the company's cash flow position and the firm needs funds for its business continuity and growth over the next 12-18 months, Blue Star said in a regulatory filing.
The company's board in a meeting has "approved issuance of NCD up to Rs 500 crore through private placement on such terms and conditions to be agreed with the eligible investors", it added.
Based on this approval, the company intends to issue NCDs amounting to Rs 300 crore in the near term to primarily finance working capital and capital expenditure subject to the terms of the issue, said Blue Star.
Blue Star Vice-Chairman and Managing Director Vir S Advani said the ongoing lockdown has adversely affected the company's cash flow and, consequently, the working capital cycle is likely to get lengthened.
The company has just resumed production partially at its Wada (Maharashtra) and Dadra (Dadra and Nagar Haveli) plants, and other operations are set to resume progressively as and when the government announces relaxations.
Blue Star expects demand revival from the second half of the current financial year, and it is important to persist with capital expenditure pertaining to indigenisation and backward integration programmes.
"Therefore, it is prudent to infuse additional funds through the issuance of NCDs in order to retain adequate liquidity to support business continuity and growth over the next 12 to 18 months," said Advani.
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