Kesoram to raise Rs 600 cr in equity to reduce high-cost debt

The company had taken the high-cost debt, via Non-convertible debentures and Optionally convertible debentures at an interest cost of 19.5 per cent from a clutch of private investors, to settle bank debts

Kolkata: BK Birla Groups Kesoram Industries is planning to raise Rs 500-600 crore by way of equity as a precursor to the roadmap of eliminating its entire Rs 1,900 crore high-cost debt over the next 24 months.

The company had taken the high-cost debt, via Non-convertible debentures and Optionally convertible debentures at an interest cost of 19.5 per cent from a clutch of private investors, to settle bank debts.

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Sources told PTI that the company board will meet on May 14 to clear decks for infusing equity capital. “Rising funds up to Rs 600 crore by way of equity will take place in tranches. In the first tranche, a rights issue worth around Rs 200 crore is likely to be floated,” the sources said.

For the balance amount, the company will explore other instruments, including private placement, Global Deposit Receipts to name a few. The rights issue is expected to be completed by September-October.

The equity infusion will help the cement maker to reduce debt to EBITA ratio to 3:1 from 4:1 and improve its ratings. In absolute terms, the company aims to keep the debt level at not more than Rs 1,500 crore.