Kesoram Industries board approved the issuance of debentures up to Rs 2,200 crore

The Fund Raising Committee and the Board of Directors of B K Birla Group flagship Kesoram Industries Ltd on Monday approved the issuance of Non-Convertible Debentures (NCD) and/ or Optionally Convertible Debentures (OCD) aggregating up to Rs 2,200 crore on a private placement basis.

Conversion of the existing loan into equity shares up to Rs 100 crore and zero-coupon optionally convertible redeemable preference shares up to Rs 500 crore to the existing lenders were also approved, it said.

In the regulatory filing, Kesoram Industries said, "This is to inform you that the "Fund Raising Committee" and the Board of Directors of the Company at their meetings held today, i.e. Monday, November 30, 2020, have, inter alia, approved the issuance of NonConvertible Debentures and/or Optionally Convertible Debentures aggregating up to Rs 2200 Crores on a private placement basis." It added, "Further, as part of the Resolution Plan approved in principle pursuant to the RBI Circular of June 7, 2019, issued for providing the framework for resolution of stressed assets, conversion of the existing loan into Equity Shares up to Rs 100 Crores, Zero Coupon Optionally Convertible Redeemable Preference Shares up to Rs 500 Crores to the existing lenders and convening an Extra-Ordinary General Meeting of Company for seeking approval of Shareholders for various matters were approved."

After the board meeting, the company said, Kesoram proposes to execute the resolution plan with the existing lenders and complete the same at the earliest. The infusion by the investors will aid the settlement with the existing lenders. This will improve the tight working capital position and create an environment for improving business operations.

Kesoram Industries is focusing on a sustainable turnaround and expecting to conclude its second phase of the restructuring process by inducting the strategic investor into it and finalising the debt resolution plan with its bankers.

"We hope to conclude the ongoing restructuring by December. This involves induction of a strategic investor who will infuse funds to create ample liquidity for ramping up operations and clearing of the current dues of the lenders," Kesoram's whole-time director and CFO P Radhakrishnan had told PTI earlier this month.

The first phase of the restructuring process includes the demerger of its tyre business from the company.