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Shree Renuka Sugars’ Debt Will Fall To Rs 1,500 Crore Post Restructuring, Says Murkumbi 

Shree Renuka aims to significantly pare debt post the debt restructuring exercise.



Raw cane sugar is piled inside a storehouse at a mill in Thibodaux, Louisiana, U.S. (Photographer: Luke Sharrett/Bloomberg)
Raw cane sugar is piled inside a storehouse at a mill in Thibodaux, Louisiana, U.S. (Photographer: Luke Sharrett/Bloomberg)
  • Wilmar Sugar Holdings to make additional investments
  • Shree Renuka Sugars hopes to significantly pare debt post restructuring
  • Restructuring subject to approval from regulatory authorities

Integrated sugar manufacturing company Shree Renuka Sugars Ltd. announced a debt restructuring exercise, which will see one of its existing promoters – Wilmar Sugar Holdings Pte hiking stake in the company.

Wilmar Sugar Holdings will make an additional investment of Rs 783.96 crore through an issue of 50 crore compulsorily convertible preference shares priced at Rs 16.27 each. Wilmar’s stake post the conversion of the shares will rise to 38 percent from the current 27 percent.

“The company’s standalone debt will come down to Rs 1,500 crore from Rs 3,600 crore in March. Interest costs will come down to less than half of the current levels,” Narendra Murkumbi, vice-chairman and managing director of Shree Renuka Sugars told BloombergQuint in an interview. Part of the proceeds will also be used to fund the Indian company’s working capital requirements.

The completion of this issue is subject to approval from shareholders, the oversight committee of the Reserve Bank of India and anti-trust clearances from the relevant competent authorities.

The company hopes that this exercise, once completed, would significantly pare its debt burden and interest cost in India and would also free the company of all guarantees and obligations related to its overseas subsidiaries.
Shree Renuka Sugars’ Statement

The company also hopes to have three serious bidders for one of its Brazilian units, which will enable it to settle the Rs 5,000 crore debt that the unit has, Murukumbi said.

The company in its board meeting has also decided to issue global depository receipts (GDRs) aggregating to Rs 800 crore.

Shares of Shree Renuka Sugars rose as much as 1.6 percent to Rs 19.41 in Friday’s trade. The stock has gained 37 percent on a year-to-date basis.