Mumbai: Bulk drug manufacturer Morepen Laboratories said on 20 September it will raise Rs140 crore through the issue of equity shares and warrants to US-based Avenue Capital Group and its promoters.
“The entire Rs140 crore being brought in by the company as fresh capital will be utilized for repayment to banks under Corporate Debt Restructuring (CDR) scheme for which a settlement has already been arrived at,” the company informed BSE.
“Morepen Laboratories today announced the signing of a deal with Avenue Capital through its subsidiary G L India Mauritius III Ltd for a 14.99% stake in the company,” it added.
As per the subscription agreement, Avenue Capital is subscribing 3.85 crore shares at Rs20 each for Rs77.06 crore. In addition to this, the US fund would also subscribe to warrants up to 5% of the enhanced capital base for Rs27.04 crore.
Besides, promoters would subscribe to warrants that can be converted into 10 crore equity shares, for Rs60 crore.
Post subscription the promoter’s stake in the company would stand at 46%, G L India Mauritius (Avenue Capital) would hold 14% and the public holding would be 38%.
As a part settlement of debt, Morepen has already issued preferential capital of Rs103 crore to banks which would have an option to be converted into equity after seven years.
Post this settlement, Morepen would not have any pending liabilities with banks and would have a serviceable debt of only Rs72.39 crore, bearing an average interest of 8.25% a year.
Shares of the company were trading at Rs19.35, up 9.94% on BSE late afternoon.