India’s largest paper company Ballarpur Industries Ltd (Bilt) has received its board’s approval to raise up to Rs 500 crore ($81.2 million) through a mix of non-convertible redeemable preference shares and non-convertible debentures, as per a stock market disclosure.
It did not give a timeline for the fundraising nor a reason for the proposed fundraise.
Recently, International Finance Corp signed a definitive agreement with Bilt Paper BV, a step-down subsidiary of Bilt, for subscription of new shares worth $100 million, valuing the Dutch subsidiary at $700 million.
Following the completion of shares subscription, IFC — the private sector lending arm of The World Bank — will own 14.29 per cent stake in Bilt Paper, formerly known as Ballarpur International Graphic Paper Holdings (BIGPH).
Bilt Paper is also planning to list its shares at an overseas exchange and has filed its draft prospectus at Singapore.
The company had previously explored such options and even announced plans to raise $330 million through a listing on the London Stock Exchange in 2011. Bilt had later postponed and eventually put the plans on the back burner.
Seven years ago Gautam Thapar-led Avantha Group company went through a corporate restructuring by hiving off the commodity paper & pulp business into this separate step down subsidiary.
The parent company Bilt was left with the front facing or retail side of the paper business including stationery paper, printing and photocopy paper and specialty paper, apart from the branded retail products under Bilt.
However, in 2012 it had flipped its strategy to move almost all of its paper production business in the country under this arm. The group has around half a dozen paper production units including one in Malaysia.
Shares of Bilt were trading at Rs 17.10 each, down 7.57 per cent on BSE in a strong Mumbai market on Wednesday at 12.39 PM.
(Edited by Joby Puthuparampil Johnson)