Shree Renuka to sell stake to Singapores Wilmar for Rs 517 cr

Written by Press Trust of India | New Delhi | Updated: Feb 21 2014, 05:54am hrs
Leading sugar firm Shree Renuka Sugars on Thursday said it will sell 25.75 crore fresh equity shares to Singapore-based agri-business firm Wilmar International for R517 crore in order to reduce the companys debt. The companys board of directors approved the issue and allotment of up to 25,74,91,592 equity shares for a price of R20.08 per share, aggregating to R517.04 crore, to Wilmar Sugar Holdings on preferential basis.

Renuka Sugars said it has entered into an agreement with Wilmar International through its subsidiary Wilmar Sugar Holdings (WSH), to facilitate the investment of about $200 million in the primary capital of the company.

Renuka said the deal would be done in two steps. First, WSH would invest up to R517 crore in the company through a preferential allotment of fresh equity.

After this preferential issue, the existing promoters and WSH would hold 27.5% of Renuka Sugars expanded equity share capital, the statement said.

At present, promoters hold 38.36% stake.

Renuka said there would be an open offer by Wilmar Sugar Holdings and the existing promoters for up to 26% of the expanded share capital at R21.89 per share.

The second step would involve Wilmar and the existing promoters of Renuka Sugars jointly participating in a rights issue to raise upto a further R725.4 crore of primary equity capital for Shree Renuka Sugars, the statement said.

Under a JV, signed between the existing promoters, WSH and the company, Renuka Sugars would be jointly controlled by the existing promoters and Wilmar with both companies holding equal stakes and board representation. The existing promoters would continue with the management of the company.

The investment is subject to approval of shareholders, anti-trust clearances in India and Brazil.

Shree Renuka scrip closed at R22.40 on Thursday, on the BSE.