Mumbai: Four investors—Anam Transport Pvt. Ltd, Sanjivani Horticulture Pvt. Ltd, Arsh Advisors and Owners Ltd and Asian Sirius Energy Ltd—will own a 40.28% stake for Rs90.6 crore in the Mumbai-based wine maker Indage Vintners Ltd, or IVL, if they decide to convert their 10.3 million preferential warrants into equity shares at Rs88 a share.
The company informed the Bombay Stock Exchange about the issuance of the warrants on Monday.
Under Indian capital market regulations, warrants can be converted into equity within 18 months of their issuance.
This graph shows Indage Vintners shareholding.
IVL will use the money raised from the investors to reduce debt, fund existing operations, meet long-term working capital requirements and other corporate purposes, it said. The IVL board also decided to raise another Rs110 crore by selling shares to qualified institutional buyers.
The company that makes the popular Riviera brand of wines will seek shareholders’ consent for these proposals on 4 July.
After the conversion of warrants into equity by the four investors, the promoters’ stake in IVL will decline to 15.88% and public shareholding to 17.82% from 29.84%.
A senior company executive said none of these four investor firms belonged to the promoter group. According to IVL vice-chairman Arun Shah, these are some of the old investors who had been with the company from the beginning.
On 10 June, the IVL board had approved a proposal to raise Rs200 crore by issuing shares, convertible share warrants and debentures to investors and through placements with financial institutions.
The IVL’s share dropped 4.97% on Tuesday to close at Rs85 a share on Bombay Stock Exchange.
“We are exploring all options to raise funds either through equity or debt. We have appointed professional firms to advise us to complete this exercise that is expected to be completed in two months,” Shah said, but declined to name the advisers.
According to the company’s filings with the stock exchange, the promoters had pledged a 26.71% stake, out of the 28.08% they owned, to borrow money.
Shah did not reveal the purpose for which the money had been borrowed.
Asked whether the company could be a takeover target with the bulk of the promoter’s stake having been pledged, Shah said, “We do not see a threat of a takeover.”
The Indian wine makers are facing tough times as competition increases from both foreign and domestic companies.
In the past two years, at least seven new wine makers and importers have entered the local market, which is expected to grow at an annual pace of 27-30%.