Kesoram completes Rs 1900cr high-cost debt refinancing to yield 800 basis points interest benefit
Kesoram has completed the refinancing of its nearly Rs 1900 crore high-cost debt, yielding a benefit of almost 800 basis points in interest rates, a senior company official said on Thursday. The company borrowed approximately Rs 1900 crore in March 2021 from a group of investors in Non-Convertible Debentures (NCDs) and Optionally Convertible Debentures (OCDs) at an interest rate of close to 19 per cent.
On Thursday, the company announced the redemption of the entire outstanding outstanding NCD amounting to Rs 1487 crore before maturity. OCDs were redeemed earlier, officials said.
«We have refinanced the entire debt on our books. We have refinanced about Rs 1500 crore from Tata Capital group and another Rs 350 crore from Hero Finance,» Kesoram's whole-time director & CEO P Radhakrishnan told PTI.
«Our average cost of debt has now decreased to nearly 11.25 per cent from over 19 per cent previously. This will lead to a reduction in our interest burden by more than Rs 30 crore on a quarterly basis, positively impacting our bottom line,» he added.
Regarding the progress of the sale process of the cement business to UltraTech Cement, Radhakrishnan mentioned that although the effective date remains April 2024, he expects it to take some time to obtain all regulatory approvals.
UltraTech Cement to acquire Kesoram Industries' cement business in an all-share deal valued at approximately Rs 7,600 crore, including debt. In this arrangement, Kesoram shareholders will receive one share of UltraTech Cement for every 52
