Singapore-based agricultural commodity player Wilmar International has taken a controlling stake in Shree Renuka Sugars, one of India’s largest sugar companies that was saddled with high levels of debt.
As of December 30, both the Indian promoter and Wilmar had a stake of just above 27% with about 257 mln shares each.
On Friday, the company issued 482 mln shares to Wilmar at Rs 16.27 each, raising Rs 785 cr and diluting founder and promoter Narendra Murkumbi’s stake to about 13%. The company’s shares are currently trading at Rs 15.65.
The sugar company also said today that Murkumbi will step down from his executive position as the company’s managing director and vice chairman, giving Wilmar a direct role in running the company from now on.
Wilmar Sugar will also make an open offer to shareholders.
“Mr. Murkumbi will continue to serve in his executive position as Vice Chairman and Managing Director during his notice period, which extends for 90 (ninety) days or until completion of the open offer being made by Wilmar Sugar Holdings Pte. Ltd. in connection with its investment, whichever is later,” the Indian company said.
Like most other sugar manufacturers in India, Shree Renuka Sugars too has been bogged down by huge debt due to the downturn in the sugar cycle.
Murkumbi, however, said the company has managed to more or less halve its to around Rs 2,000 cr over the past one year.