Suzlon Energy rights issue: Company targets debt-free status in next 8 years
1 min read 11 Oct 2022, 02:07 PM ISTSuzlon Energy rights issue worth ₹1,200 crore has opened on Tuesday, October 11, 2022
PremiumAddressing a virtual press conference, Suzlon Energy Ltd's Chief Financial Officer (CFO) Himanshu Mody on Tuesday said that the company would be able to pare its debt by ₹583.5 crore, if its rights issue worth ₹1,200, that has been launched on October 11, 2022, gets fully subscribed.
“Suzlon's ₹583.5 crore debt will be repaid with the assumption of full subscription of ₹1,200 crore rights issue opened on Tuesday. The total debt of the company was ₹3,200 crore as of June quarter 2022-23 and the company would be able to repay the remaining debt in the next eight years," Mody said on Tuesday.
Suzlon Energy's rights issue worth ₹1,200 crore has opened on Tuesday, October 11, 2022. Under rights issue, fresh equity shares are offered by a company to those who are existing shareholders. Further, these existing shareholders get the right to buy fresh shares using their 'Rights Entitlement'. The closing date for the rights issue is set on October 20, 2022. Shares of Suzlon Energy Ltd were trading more than 6% lower at ₹7 apiece on the BSE in Tuesday's afternoon trading session.
The company will issue up to 240 crore partly paid-up equity shares for cash at a price of ₹5 per share (including a premium of ₹3 per rights equity share) aggregating to ₹1,200 crore.
Suzlon promoters and promoter group have confirmed their participation and they will be fully subscribing to the extent of their rights entitlement.
Funds raised through the issue will be used for repayment or pre-payment of a portion of certain outstanding borrowings availed by the company and its subsidiaries and for general corporate purposes. Inga Ventures is the lead manager to the issue.
Mody emphasised that the company would have much leaner, healthier and better balance sheet after the issue and there will be no decline in the promoters' holding after the issue. About an earlier instance of decline in promoter holding, Mody said it happened due to conversion of certain bonds (debt) into equity (under the debt restructuring plan).
(With inputs from PTI)
