BK Birla’s diversified firm Kesoram Industries Ltd is looking to raise Rs 180 crore (approximately $26 million) through a preferential issue of equity shares to a promoter entity and an issue of optionally convertible preference shares to IndusInd Bank, as per a stock market disclosure.
The board of the company has proposed to raise up to Rs 90 crore through equity issue to Manav Investment and Trading, which is a promoter entity.
Besides, the Kolkata-based company will be issuing optionally convertible preferential shares worth up to Rs 90 crore to IndusInd Bank. This is an unusual transaction as banks typically do not invest through preferential allotment in a company unless it is part of a debt restructuring deal.
The company would now seek shareholders’ approval through a postal ballot.
As on December 31, 2015, the promoter group, BK Birla group, held 46.1 per cent equity stake in Kesoram Industries, stock exchange data show.
In September last year, JK Tyre & Industries Ltd agreed to buy Haridwar tyre plant of Kesoram Industries at an enterprise valuation of Rs 2,195 crore (then $330 million), in one of the biggest acquisitions in the domestic automotive tyre sector.
Founded in 1909, Kesoram Industries (formerly Kesoram Industries & Cotton Mills Ltd) is engaged in manufacturing and selling cements, tyres, rayon, yarn, transparent papers, spun pipes and heavy chemicals.
It offers automobile tyres and tubes, and flaps, clinker and cement, sulphuric acid, viscose filament rayon yarns, sodium sulphate, transparent cellulose films, carbon-disulphide, and sodium sulphide products, and cast iron spun pipes and pipe fittings.