Wilmar International, the world's largest palm oil processor, on Friday said it would invest Rs 7,839.6 million (USD120 million) in Mumbai-based Shree Renuka Sugars.
As per the deal, Wilmar International's unit Wilmar Sugar will make the additional investment via issue of 500 million non-voting compulsorily convertible preference shares priced at Rs 16.27 each.
The investment, which will be funded from internal sources and bank borrowings, would raise Wilmar's stake in Shree Renuka Sugars to 38 percent from current 27 percent.
The additional capital infusion by Wilmar will help Shree Renuka Sugars settle some of the debts and fund working capital requirements.
"The Company hopes that this exercise, once completed, would significantly pare its debt burden and interest cost in India and would also free the Company of all guarantees and obligations related to its overseas subsidiaries, " Shree Renuka Sugars said in a statement.
The company has a debt burden of about Rs 67 billion.
Edelweiss Financial Services was the sole financial advisor for Wilmar which was also advised by law firm Trilegal.
Shree Renuka Sugars was advised by Crawford law firms Bayley & Co and Khaitan & Co, with IMAP India as the financial advisor.
Shares in Wilmar International were unchanged on the Singapore Exchange while Shree Renuka Sugars lost 0.8 percent to Rs 18.25 on the Bombay Stock Exchange.
