IL&FS Transportation Networks’ rights issue worth Rs. 524 crore will open on Monday. The proceeds will be utilised mainly for repaying loans.
The company will issue 5.24 crore equity shares of face value Rs. 10 each for cash at Rs. 100 per share (a premium of Rs. 90) for an aggregate amount of up to Rs. 524.52 crore to the existing investors.
The issue will close on May 12, according to the offer document filed by the company with market regulator Securities and Exchange Board of India (Sebi).
In a rights issue, shares are issued to existing investors as per their holding at a pre-determined price and ratio.
In this issue, every shareholder with 100 shares will be eligible to buy 27 shares of the company.
The Mumbai-based firm, which is one of the largest private sector operators of BOT (build-operate-transfer) roads, plans to use the proceeds for repaying loans and other general corporate purposes.
As per the IL&FS Transportation’s offer document, the firm will utilise Rs. 510 crore from the net proceeds of the issue towards repayment/pre-payment, in full or part, of certain loans availed by it.
The company had an outstanding loan of more than Rs. 800 crore, as of March 10, 2014.
“We believe that reducing our indebtedness will result in an enhanced equity base, assist us in maintaining a favourable debt-equity ratio in the near future and enable utilisation of our accruals for further investment in business growth and expansion,” the offer document noted.
“In addition, we believe that the leverage capacity of our company will improve to raise further resources in the future to fund our potential business development opportunities and plans to grow and expand our business in the coming years,” the company said.
It will use Rs. 8 crore on strategic initiatives, brand building, marketing, partnerships, joint ventures, meeting exigencies or for other purposes as approved by the board.
Axis Capital, CLSA India, SBI Capital Markets and IL&FS Capital Advisors are acting as lead managers to the rights issue. Link Intime India is the registrar to the issue.