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Welspun Corp Ltd proposes to raise Rs 1,000 crore by way of an issue of non-convertible debentures. The company intends to use the funds to pay back debt.
The proceeds of the issue are to be utilised for refinancing of NCD, external commercial borrowings and possible early redemption of ‘foreign currency convertible bonds’.
Rating agency CARE has assigned the proposed instruments a rating of CARE AA- (double A minus), after taking into account the dip in the operating margins, debt repayment obligations over the next three years, including the FCCBs and the corporate guarantees given for its subsidiaries.
The agency has noted that Welspun Corp’s consolidated order book stood at Rs 9,185 crore as on June 22, and that at the end of March 2012, it had unencumbered cash, bank balance and liquid investments of Rs 2,501 crore.
On a consolidated basis, Welspun Corp’s post tax profit was Rs 224 crore for 2011-12 compared with Rs 623 crore for the previous year. Provisions for foreign exchange loss of Rs 152 crore and a Rs 65-crore ‘settlement’ with a customer, contributed to the fall in profits.
Welspun Corp is primarily engaged in the manufacture of pipes.
On the BSE today, the shares of Welspun Corp (of face value of Rs 5) closed at Rs 116.65.
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