Following lenders’ in-principle approval to a resolution plan, BK Birla Group flagship Kesoram Industries is aiming to conclude the restructuring process for improving its business operation by December, with predominantly US-based investors subscribing to its non-convertible debentures and optionally convertible debentures aggregating up to Rs 2,200 crore on a private placement basis.
After the proposed restructuring, the existing lenders are likely to have a stake of around 9% in the Kolkata-based company, a company source told FE.
As part of the resolution plan approved, conversion of the existing loan into equity shares up to Rs 100 crore and zero coupon optionally convertible redeemable preference shares up to Rs 500 crore will be offered to existing lenders.
The Fund Raising Committee and the board of directors of the company, at their meetings held on Monday, approved issuance of NCDs and/OCDs on a private placement basis. The lenders have earlier given their in-principle approval to the resolution plan of the company to raise funds and restructure its debts.
“Predominantly US-based investors will be subscribing to the non-convertible debentures and optionally convertible debentures on a private placement basis. We are working hard to complete the whole restructuring process by December,” the source said.
The company said fund infusion by investors will aid settlement with the existing lenders. “This will improve the tight working capital position and create the environment for improving the business operations,” it said.
At the company level, total debt currently stands over Rs 2,000 crore. It is looking at reducing the debt to around Rs 1,800-Rs 1,900 crore after restructuring. Lenders to Kesoram include State Bank of India, Axis Bank, HDFC Bank, ICICI Bank, IndusInd Bank and Punjab National Bank.