Shree Renuka down over 6%

Shree Renuka Sugars is down over 6% at Rs.21.10, with an intra day low at Rs.20.25. Volumes are up almost 8 times.

The stock is down in the red today that it has entered into an agreement with Wilmar International, which will help bring in an investment of around $200 million in primary capital in Shree Renuka. This investment will be done in two steps – one would an investment of upto Rs 517 crore by Wilmar in Shree Renuka through a preferential allotment of upto 25.75 crore shares of fresh equity, at Rs.20.08 per share. Post this issues, existing promoters and Wilmar would hold 27.5% of SRS' expanded equity share capital.

The company has stated that as per Sebi guidelines, there will also be an open offer by Wilmar and the existing promoters for up to 26% of the expanded equity share capital of the Shree Renuka at a price of Rs 21.89 per share. The second step would involve Wilmar and the existing promoters of Shree Renuka jointly participating in a rights issue to raise upto a further Rs 725.40 crore of primary equity capital for Shree Renuka.

The company has said that the proceeds of this investment/fund-raising would be used to pay down existing debt of SRS in India.