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New Delhi: Shree Renuka Sugars Ltd on Thursday said its board has given in-principal approval for issuing shares to existing shareholders through the rights issue to raise 725.4 crore.

Last week, Renuka Sugars had announced sale of 27.5% stake in the company to Singapore-based agri-business major Wilmar International Ltd for 517 crore.

It had also said the company would launch rights issue to raise another 725 crore. Existing promoters and Wilmar would participate in the rights Issue.

In a filing to the Bombay Stock Exchange (BSE), the company said in a meeting held on Thursday, “The board gave in-principle approval for issue of equity shares to the existing shareholders on a rights basis at an issue price not exceeding 16 per share to raise an amount not exceeding 725.4 crore, subject to the applicable laws and regulatory approvals."

The terms and conditions of the rights issue as well as the entitlement ratio, record date and timing of the right issue would subsequently be decided by a committee to be constituted by the board for this purpose, it said.

This committee will be set up after the completion of the preferential allotment and the open offer announced by Wilmar Sugar Holdings PTE, SRS Investments PTE and persons acting in concert with them as per the Sebi norms, the filing added.

On 20 February, the board had approved allotment of up to 25.75 crore fresh shares at 20.08 each for 517.04 crore to Wilmar Sugar Holdings (WSH), a wholly-owned arm of Wilmar International, on preferential basis.

After issue of fresh shares, Wilmar would have 27.5% stake in Renuka Sugars, while promoters stake would also come down to 27.5% from 38.36% stake as on 31 December 2013. WSH and the existing promoters have also announced open offer for up to 26% of the expanded share capital at 21.89 per share.

Renuka Sugars operates 11 sugar mills in India and Brazil with a total crushing capacity of 20.7 million tonnes per annum and two port-based refineries with sugar production capacity of 1.7 million tonnes per year.

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