Bombay Rayon Approves Share Issue For Debt Recast
Bombay Rayon will issue a mix of equity shares and convertible debentures under S4A.
Textile manufacturer Bombay Rayon Fashion Ltd. will convert its unsustainable loans into equity shares as part of its debt restructuring process.
The board of Bombay Rayon has approved issuing a mix of 12.6 crore equity shares on preferential basis and up to Rs 410 crore worth of convertible securities to its lenders under the latest debt recast norms, a stock exchange filing said. This comes after lenders of Bombay Rayon, led by State Bank of India Ltd., invoked the Scheme for Sustainable Structuring of Stressed Assets (S4A) on April 20, 2017.
The board also approved issuing up to 48.2 lakh equity shares on preferential basis to its lenders under the company's existing corporate debt restructuring package, which it initiated in May 2016. The company, under CDR, was to issue 5.6 crore shares to the lenders. Of these, 5.13 crore shares, worth Rs 852 crore approximately, have already been issued to lenders in four separate tranches during last year.
Banks and financial institutions, as of March-end, held 28.3 percent stake in the company.
According to Bloomberg data, Bombay Rayon’s total debt was Rs 5,549.5 crore at the end of March 2016.