Wilmar International, co-promoter in Shree Renuka, is likely to invest USD 120 million (about Rs 800 crore) in the Indian sugar company. The deal will help the company in bringing down its debt and restructuring it, going ahead.
CNBC-TV18 said that since the funds will be infused into the company through convertible debentures, and via fresh equity, there will be no open offer. Meanwhile, the pricing of the investment is yet to be worked on.
The company's board is expected to meet on July 27, where the proposed investment and a debt restructuring plan will be considered.
The company seems to be planning a mega debt restructuring plan as it has also received an in-principal approval from banks to restructure its domestic debt, which could come down to about Rs 2,000 crore.
The leading sugar manufacturer has a huge pile of debt, with the consolidated debt — international and domestic — at Rs 9,500-10,000 crore. Out of this, the domestic debt figure stands at about Rs 3,500 crore.
Shree Renuka declined to offer any comments on the developments.
Wilmar's likely investment of about Rs 800-crore, along with bank's nearly Rs 1,500-crore of debt, which could be converted into equity, point to huge equity dilution in the future. This will also lead to Narendra Murkumbi family's stake coming down.
The company has a market capitalisation of about Rs 2,000 crore. The company stock fell 6.45% to Rs 20.29 apiece on Wednesday.
Wilmar International had infused Rs 1,200 crore for 27.5% stake in 2014.
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