Shree Renuka Sugars may consider rights issue on February 27. The company recently entered into a deal with Wilmar International's subsidiary Wilmar Sugar Holdings (WSH). WSH is paying USD 200 million to Shree Renuka Sugars (SRS) to jointly control the company.
As per the deal, Wilmar and the existing promoters of Shree Renuka Sugars will have to participate in a rights issue jointly to raise up to Rs 725 crore for Shree Renuka Sugars.
Subject to necessary approvals, the deal will be done in two parts, a Wilmar release had said on Thursday. Part one will involve WSH investing Rs 517 crore in Shree Renuka through a preferential allotment of 25.7 crore preferential shares at a price of Rs 20.08 per share. Post this, WSH's stake in the company will be 27.5 percent of SRS' expanded equity share capital.
This in turn will trigger a 26 percent open offer at Rs 21.89 per share.
Part two will involve a rights issue worth Rs 725.4 crore. Both Shree Renuka Sugars and WSH will participate in both the open offer as well as the rights issue. The preferential issue for the deal has been announced at a 10 percent discount and open offer at a 2.3 percent discount to the current market price of Shree Renuka Sugars at Rs 22.40 per share.
Under the terms of a joint venture agreement, SRS will be jointly controlled by the existing promoters and WSH, with both parties holding equal shareholding and board representation in SRS.
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