Renuka Sugars to seek Sebi nod for Rs 725-cr rights issue

Written by Press Trust of India | New Delhi | Updated: Jul 28 2014, 07:59am hrs
Shree Renuka Sugars said on Sunday it will soon approach market regulator Sebi with a proposal to raise about R725 crore through a rights issue.

"The file document for the rights issue is ready. We will soon approach Sebi," a senior company official said.

In February, the company's board had given in-principle approval for issuing shares to existing shareholders through a rights issue to raise R725.4 crore.

Under a rights issue, stocks are issued to existing investors of an entity as per their holding at pre-determined price and ratio.

Early last month, Shree Renuka Sugars had issued an open offer but it failed because the market price was much higher than the open offer rate of R21.89 per share.

The company had to go for a mandatory open offer after it announced sale of 27% stake in Shree Renuka Sugars to Singapore-based agri-business major Wilmar International for R517 crore through preferential allotment of fresh equity.

In the open offer, issued by both Wilmar and existing promoters proposed to acquire 24.31 crore shares at R21.89 per share, representing a

26% stake.

But the joint-venture partners were able to acquire only 1,750 shares worth R38,307 as the open offer rate was much lower than the market price of R28-29 per share.

Following the open offer, the combined stake of Shree Renuka Sugars and Wilmar stands at a little over 55% in the company, with both partners having equal stake.

Renuka Sugars operates 11 sugar mills in India and Brazil with a total crushing capacity of 20.7 million tonne per annum and two port-based refineries with sugar production capacity of 1.7 million tonnes per year.

Wilmar's business activities include oil palm cultivation, oilseeds crushing, edible oils refining, sugar milling and refining, speciality fats, biodiesel and fertilisers manufacturing and grains processing.