Shree Renuka-Wilmar deal likely today

Wilmar International is likely to finalise the agreement to buy 25 percent stake in Shree Renuka Sugars today. Shree Renuka is expected to issue preferential shares to Wilmar and that could be anywhere between 25-26 crore shares which will trigger an open offer.

The base, the number of shares outstanding will increase from 67-68 crores shares to over 100 crore shares and then the open offer will be triggered. The preferential share pricing will come around Rs 22-23 which is the current market price and open offer price could be a bit higher.

At the end of the preferential issue, the promoters of Shree Renuka and Wilmar will hold an equivalent stake in the company which will be nearly 26 percent each and post that if Wilmar gets more shares from the open market, then their stake will go higher.

Wilmar is trying to come into India, which is the second largest market in terms of sugar production and have their reach in India. It is USD 20 billion company and to get a small pie into the second largest sugar industry is not a big deal for them.  Furthermore, Shree Renuka has been looking to monetise its assets from a very long time.