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Wilmar’s open offer for Shree Renuka Sugars fails

A joint open offer by Singapore-headquartered agri-commodity giant Wilmar International with the promoters of Shree Renuka Sugars Ltd (SRSL), coming in as parties acting in concert for India’s largest sugar company, has failed.

The open offer managed to garner just 1,750 shares of 24.31 crore shares it sought to purchase, as per a stock market disclosure. The offer started on June 9 and closed on June 20.

In February this year, Wilmar said it is picking 27.5 per cent stake in SRSL through a preferential allotment worth Rs 517 crore ($83 million) to cut debt on its books piled up as part of its global expansion.

The open offer price was Rs 21.89 per share against the share price, which hovered around Rs 25-30 a share.

Post this, promoters of SRSL and Wilmar would together hold a little over 55 per cent stake in the company.

In addition, the company will come up with a rights issue worth Rs 725.4 crore, where the co-promoters will equally pick the unsubscribed portion of the issue.

The existing promoters will continue with the management of the company with Wilmar being actively involved in strategic decisions.

As on March 31, 2014, the firm had total debt of Rs 7,889 crore and paid interest of Rs 960 crore for the full year on its outstanding debt. The firm piled debt after it bought two large assets in Brazil.

It bought Distillery Valley Ivai SA (now Renuka Vale do Ivai) for $240 million in 2009 and 59.4 per cent stake in Equipav SA (Renuka do Brasil) for $250 million in the following year.

SRSL's scrip was trading at Rs 26.85, down 1.10 per cent on BSE in a mid-day market on Friday.

(Edited by Joby Puthuparampil Johnson)

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