Shree Renuka Sugars may give lenders option to convert part of loan into equity


Mumbai: Shree Renuka Sugars Ltd, one of the largest sugar producers in the world, is considering granting an option to its lenders to convert a part of the loans granted into equity shares up to 10% of the present equity share capital.

In a filing to stock exchanges, Shree Renuka said the board of directors on 30 May will consider voluntarily granting an option to the lenders of the company to convert a part of the loans granted or to be granted to the company into equity shares.

Shree Renuka may allot a maximum of 9.28 crore equity shares, which is equivalent to 10% of the present equity share capital of the company, at a price of Rs.16.56 per equity share or the price as per the regulations prescribed by the capital market regulator Securities and Exchange Board of India (Sebi), whichever is higher, the company said.

The company did not divulge further details.

As of March 2015, total consolidated debt of the company was at Rs.8,896.72 crore.

In March, rating agency Icra Ltd had downgraded ratings of certain term loans of Shree Renuka to ‘D’, owing to delay in debt servicing by the company.

Icra said it has downgraded the long-term rating of BB with negative outlook and the short-term rating of A4 to D outstanding on the bank facilities of Shree Renuka Sugars aggregating to Rs.6,513.47 crore.

The downgrade of ratings takes into account the delay in debt servicing by the company in the recent past, owing to stretched liquidity position arising from adequate accruals from core operations and high debt repayment obligations, Icra said.

A joint lenders’ forum has been formed to review the company’s refinancing package wherein it has sought additional term loans, the rating agency had said.

While most of the banks have approved the package, the timely disbursement of the same would remain important from a credit perspective, the rating agency said.

In September 2015, Shree Renuka Sugars said that its Brazilian units have filed for bankruptcy protection in the country.