Shree Renuka Sugars zoomed up by almost 8 per cent intraday to Rs 17.35 on the NSE after the Assembly of Creditors of Renuka do Brasil S/A (RdB) announced the approved the Reorganization Plan presented by Renuka do Brasil S/A on 26th August, 2016. Renuka do Brasil is Shree Renuka Sugars’ largest subsidiary.
This plan has been approved by the Assembly of Creditors. It obliges the banks along with most of the creditors of RdB (except employees, sugarcane & other essential suppliers and SME suppliers) to settle their existing debts on receiving 30 per cent of the notified value of debt plus interest from the date of the plan approval until the date of payment.
The total bank debt in Renuka do Brasil as on the date of filing the Recuperacao Judicial (28thSeptember, 2015) was BRL 2,063 mn (Rs 4,301 crores) and other liabilities covered by the above plan are BRL 210.8 mn (Rs 440 crores) implying total reduction of liabilities by BRL 1,592 mn (Rs 3,319 crores).
The settlement of debt would be funded by sale of one of the mills of RdB (Madhu Mill) with the capacity of 6 million mt cane crushing capacity out of total 10.5 million mt cane crushing capacity in Renuka do Brasil.
Shree Renuka Sugars is not putting any new capital under this plan either as debt or equity. However any shortfall in reaching the target value of 30 per cent (approximately BRL 682.2 mn or Rs 1,422 crores) will have to be funded by the shareholders of RdB in cash or by sale of Shree Renuka Sugars controlling stake in RdB, the company said in a press release.
The Company also added that this plan is subject to final approval by the presiding judge as per the Judicial Protection Law.
Shree Renuka share price is currently trading at Rs 16.95, showing an upward movement of 6.27 per cent. The intraday high and the intraday low of the share are Rs 17.35 and Rs 16.50 respectively.
Shree Renuka is one of the Top 500 shares recommended by Dynamic Levels (Check Shree Renuka share price forecast for important levels).
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