Future Retail Ltd (FRL) said on Monday its board has approved raising of nearly ₹2,000 crore through issue of warrants to its promoters on a preferential basis.
The board of directors in its meeting approved issuance and allotment of over 39.60 lakh warrants convertible into 39.6 lakh equity shares of ₹2 each at a premium of ₹503 per share aggregating to ₹1,999.99 crore to promoter group firm Future Coupons Ltd, the company said in a regulatory filing.
The allotment on a preferential basis will be subject to shareholder approval for which an extraordinary general meeting (EGM) will be held on March 5, it added.
The Kishore Biyani-led company further said each warrant is convertible into one equity share and the conversion can be exercised at any time during the period of 18 months from the date of allotment.
In an investor presentation, the company said its promoters and management are highly motivated to contribute towards an integrated growth for FRL.
"To this extent, promoters are committing an equity infusion of ₹2,000 crore at a price of ₹505 per share," it added.
Elaborating on where the funds would be utilised, the company said the equity infusion, coupled with inflow of upside share, shall aid in reducing the lease rentals payable to FEL.
"The endeavour is to completely do away with lease rentals in next 18 months. Management firmly believes that this shall be hugely accretive to margins for business and will give a strong philip to growth," it said, adding that it would also maintain strong trajectory of improving return on capital at FRL.
The company said over the past four years, FRL has integrated its operations efficiently and built a pan-India network of 1,444 stores in 409 cities of India.
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