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| Preferential offer of warrants to promoters |
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Aditya Birla Nuvo, as a conglomerate, is progressing well on designated growth path to tap the sector opportunities, particularly in the Financial Services, Fashion & Lifestyle and Manufacturing businesses.
To meet the growth capital requirements, the Board of Directors of the Company, at its meeting held on March 26, 2012 approved the proposal for issue of 16.5 million warrants to Promoters / Promoter Group on preferential basis, subject to the shareholders’ approval, in accordance with the provisions of SEBI (ICDR) Regulations, 2009.
Considering the capital requirement and current financial position of the Company, this equity infusion will keep the balance sheet and financial ratios of the Company in a healthy state while capturing the next level of growth. As on 31st December 2011, standalone net debt was about Rs. 3,800 Crore and Net Debt to EBITDA was 3.7 times.
The proceeds of about Rs. 1,500 Crore will be utilized to deleverage the Company’s balance sheet and to meet growth capital requirement over next three years viz., funds for growing Financial Services and capital expenditure plans including debottlenecking & customised fertilizers projects in the Agri-business, Caustic Soda & VFY capacities expansion in the Rayon business and scaling up of retail stores in the Apparels business. The equity infusion will also provide cushion to the balance sheet for capturing future growth opportunities.
A sum of about Rs. 375 Crore will be received in advance as 25% application money on allotment of warrants. Post exercise of these warrants, promoters’ holding will increase from current 51.05% to 57.25%.
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