Suzlon Energy Rights Issue: Suzlon Energy launched a rights issue of 1200 crores, know what the company's plan
Suzlon Energy Rights Issue This rights issue is very important for Suzlon Energy, which is facing financial crisis. The company will try to repay its borrowings from the amount received from it. Till June, the company had a debt of 3200 crores.
Suzlon Energy Rights Issue: The rights issue of 1200 crores of Suzlon Energy has been opened. With the money raised from the rights issue, the company will be able to repay the debt of Rs 583.5 crore. Suzlon Group Chief Financial Officer Himanshu Modi said in a virtual press conference that Rs 583.5 crore debt would be repaid from the Rs 1,200 crore rights issue that opened on Tuesday.
He also said that the total debt of the company as of June quarter 2022-23 was Rs 3,200 crore and the company would be able to repay the remaining debt in the next eight years.
Promoters' stake will not fall
Suzlon Group Chief Financial Officer Himanshu Modi claimed that the company's balance sheet will be better than before after the issue. He assured the promoters that there would be no fall in their stake post the issue. When asked about an earlier incident of decline in promoter holding, he said that it was due to conversion of some bonds (debt) into equities.
How things changed after Tanti's death
Earlier this month, Suzlon Energy had said its promoters had confirmed their participation in the rights issue following the death of its founder and CMD Tulsi Tanti. Let us tell you that Tanti died on 1 October.
What is Suzlon Energy's offer
As per the proposal letter, the company will issue up to 240 crore partially paid-up equity shares at a price of Rs 5 per share. This also includes a premium of Rs 3 per right equity share. Altogether it comes to Rs 1,200 crore. That is, the issue will be in the ratio of 5 rights equity shares for every 21 fully paid-up equity shares held by eligible shareholders as on October 4, 2022. The funds raised through the issue will be used for repayment of a part of the borrowings taken by the Company and its subsidiaries and for general corporate purposes.