(PTI) Kesoram Industries, the B K Birla group company, on Thursday said it has raised ₹90 crore by allotting ninety lakh non-convertible preference shares to a promoter shareholder.
The fund will help ease the liquidity condition of the cement maker, a company official said.
In a regulatory filing, the Kolkata-based company said the face value of "unlisted 5 per cent non-convertible cumulative redeemable preference shares" is ₹100 each and these shares are allotted at par on a private placement basis to Manav Investment and Trading Company Ltd, the promoter shareholder.
The company currently has an outstanding high-interest-bearing debt of around ₹1,600 crore, the official said.
The cement maker aims at bringing down the interest burden considerably by improving earnings before interest, taxes, depreciation, and amortisation (EBITDA) and replacing high-cost debt with low-interest-cost funds, he said.
Kesoram had raised ₹400 crore, which "helped the company reduce the high cost of borrowing" last year, he said.
"The capital injection will provide the company with the much-needed support it needs to move into traditional banking channels to raise funds and reduce interest costs," the official said.
In an endeavour to raise low-cost working capital, Kesoram has also opted for a fixed deposit market, offering around 12.25 per cent annual return.
"The company has already raised around ₹100 crore so far through this route, out of a window of up to ₹187 crore," the official said.
Kesoram's consolidated loss for the second quarter of the current fiscal was ₹59 crore due to high input costs and lower realisation owing to the monsoon season.
"Demand and realisations will improve in the second half" of the year as the cost pressure in the first two quarters is "easing out with moderation in prices of input commodities", the official said.
"We were able to earn an EBIDTA of ₹140 crore in the April-September 2022 period amid pressure on cost and expecting better realisation and higher capacity utilisation. The company was operating at over 60 per cent out of 10 million tonne cement install capacity," he said. Cement is the main business for Kesoram, while rayon, transparent paper and chemical verticals account for less than 10 per cent of its total revenue.
The company has hived off its tyres business into a separate company and was seeking a strategic investor to revive it.