Shriram EPC up over 9%
Shriram EPC, which has been lackluster for some time now has shown a sudden spike up of interest today. The stock is up at Rs.39.65, 9% higher and volumes are also pretty robust at 29,000 shares traded in the morning session alone, compared to two-week average of 15,000 shares.
The engineering arm of the Shriram Group, the company stated that it has scheduled a Board meet on 10th April to consider issuance of equity shares to lenders under the corporate debt restructuring (CDR) package.Under this, the proposal is to convert the funded interest term loan of the CDR lenders into equity shares of the company. The board will also consider issue of equity shares of the company on preferential basis to the promoters, Shriram Industrial Holdings Ltd (SIHL). The proceeds would be utilized towards redemption of cumulative redeemable preference shares and the repayment of the unsecured loan.
The company ‘s Rs.2530 crore CDR was approved last fiscal. Since then, the company which had been paying its 21 lenders, led by Oriental Bank of Commerce, at the rate of 13-14% , post the CDR it was fixed at 11.25% with a two-year moratorium on interest payments. 18 lenders were part of the CDR restructuring. Under the package offered, Shriram EPC would get 10 years to repay the loan.
In October 2013, EPC’s board had approved raising R300 crore by issuing cumulative redeemable preference shares in one or more tranches.