The company after market trading hours announced sale of 27.5 per cent stake in the company to Singapore-based agri-business major Wilmar International for Rs 517 crore.
Reacting to the development, the stock opened on a weak note at Rs 20.40 and then lost further momentum to touch an early low of Rs 20.25 on the BSE Sensex.
Similar trend was seen on the National Stock Exchange as well where the stock slipped 10.04 per cent to an early low of Rs 20.15.
Market experts said the downtrend in the counter was largely on equity dilution after the Wilmar deal. Pursuant to the deal, the Singapore-based agri-business major and the founders of the Indian company would own equal stakes in Shree
"After issue of fresh shares, Wilmar will have 27.5 per cent stake in Renuka Sugars, while promoters stake will also come down to 27.5 per cent," Renuka Sugars Vice-Chairman and Managing Director Narendra Murkumbi had said yesterday.
Renuka would raise another Rs 725 crore from the proposed rights issue in which both existing promoters and Wilmar would participate. The total Rs 1,242 crore raised would be utilised to cut the debt.
The Board approved allotment of up to 25.75 crore fresh shares at Rs 20.08 each for Rs 517.04 crore to Wilmar Sugar Holdings (WSH), a wholly-owned arm of Wilmar International, on preferential basis, the company said in a filing to the BSE.
(Reuters) Shree Renuka shares slump on fears of equity dilution after Wilmar deal
Shares of Shree Renuka Sugars Ltd slumped 10 per cent in pre-open trading on fears of equity dilution after Singapore's Wilmar International said on Thursday it has agreed to invest up to $145 million for a major stake in the company.
The transaction, which will be completed in multiple steps, will see Wilmar - the world's top palm oil processor with business interests in sugar, lauric oils and other commodities - and the founders of the Indian company owning equal stakes in Shree Renuka.