Jain Irrigation Systems (JISL) is planning to raise around $200 million (about Rs 1,100 crore) by issuing fresh equity, FCCBs to overseas investors apart from raising external commercial borrowings and warrants to promoters. In a move to deleverage and strengthen its balance sheet, reducing interest cost and balancing its currency exposure with long-term maturities, the company is planning this fund raising exercise.
IFC, part of the World Bank group, would be contributing significantly in the convertible bond issue, apart from participating in equity as well as ECB (External Commercial Borrowings). Part of equity funds are being raised from private equity firm, Mount Kellett. Moreover, ECB would be raised from the combination of European Global Development Financial Institutions and Rabo Bank.
The funds would be utilized for repayment of company’s and its subsidiaries’ high cost short-term and long term loans due in 2012-13 fiscal, besides investing into JISL's overseas subsidiaries to enable continued growth and also for capital expenditure. Moreover, the company would also utilize these funds to fuel the growth of recently created non banking financial company (NBFC), Sustainable Agro Commercial Finance.