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Future Retail to raise Rs 2,000 cr through issue of shares

By Ishita Ayan Dutt & Avishek Rakshit |Kolkata| Business Standards | Vjmedia Works | June 12, 2014

About 75% of the funds raised will be used to reduce debt

Future Retail on Wednesday said it would raise Rs 2,000 crore by issuing shares to promoters and investors. Of the proceeds, about Rs 1,500 crore would be used to reduce debt, the company said.

The company's debt stands at about Rs 5,500 crore. During the quarter ended March, it paid interest of Rs 155 crore, 98 per cent of its profit before interest and taxes for the quarter.

The company's debt is 1.7 times its equity; if the company uses Rs 1,500 crore to repay debt, its debt-to-equity ratio will come down to 0.8. For the quarter ended March, the company had posted a profit after tax of Rs 1.8 crore on revenue of Rs 2,345 crore.

The company said it would raise Rs 1,600 crore through a rights issue and an additional Rs 400 crore by issuing shares and warrants on a preferential basis to investors and promoters.

It will issue 15.3 million shares of Rs 130 each on a preferential basis to Brand Equity Treaties, owned by Bennett Coleman & Co, aggregating Rs 199.9 crore.

It will also issue 7.6 million warrants at Rs 130 each, aggregating Rs 99.99 crore, to Future Corporate Resources, a promoter group entity, with an option that the warrant holder acquire the same number of shares within 18 months. After the conversion of warrants, promoter holding in the company will fall from 48.36 per cent to 46.91 per cent. On Wednesday, the Future Retail stock closed at Rs 135 on BSE, down 7.22 per cent.
Tags : Future Retail
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