Pratibha Industries Ltd has informed BSE that it plans to raise funds to the tune of Rs 250 crore via QIP issue or preferential allotment of shares.
Ravi Kulkarni, Wholetime Director, Pratibha Industries said the funds raised would be used to pare down debt and bring down the debt equity ratio to 2 from 2.7. Part of the proceeds will also be used for existing operations, he added.
The company is also looking at monetising by hiving off their pipe mill, by selling their land bank, which will help bring down debt, said Kulkarni.
Below is the transcript of Ravi Kulkarni's interview with Nigel D'Souza and Ekta Batra on CNBC-TV18.
Ekta: Can you tell us your fund raising plans? What is it going to be used for, what is the method that you will most likely adopt and by when?
A: We feel that markets are very positive and there is a very healthy growth in the infrastructure with the new government. That is why our management feels that it is time to raise funds. Basically, we are having a debt of around Rs 1,800 crore and by raising Rs 250 crore through QIP, we feel that we will reduce our debt plus we will also use these funds for our ongoing projects.
Nigel: So you are going to use this entire Rs 250 crore?
A: Not entire. We are going to have a combination of projects, and also some of it will be used for reducing the debt. As of today our debt equity ratio is around 2.7 which we would like to reduce to 2 percent. We have around Rs 300-400 crore of assets which we want to sell. So we are looking forward to that also.
Ekta: Can you tell us Rs 1,800 crore debt to equity is a little over 2 percent, you would like to bring it down to 2 percent - can you tell us what that would mean in terms of an absolute reduction and debt?
A: I cannot give you the exact numbers because we are now working on those numbers to see how we can reduce our debt.
Ekta: What is the figure that you are comfortable with on the balance sheet?
A: It should be around 2 percent, our debt as of today is around 2.7 percent, which is relatively high and we would like to come down to 2 percent. We are taking all efforts to raise funds through QIP and markets too are very positive. We feel that this is a right time to raise funds through QIP. We have also been meeting some bankers, good institutions to raise this fund through our QIP route and they too feel this is the right time to do this.
Nigel: Your debt reduction plans with regard to the other assets that you have - you have been looking at selling your pipe manufacturing business for sometime. Could you tell us what is the valuation you are looking at because it has been reported for the last one year, when exactly can we see that coming through and as of today, what does their asset contribute to your business?
A: We were into pipe manufacturing and we have now completely stopped that business. We want to stick to our core business but since markets were not good earlier, there were no buyers in the market. As of today, we have couple of buyers who are ready to buy and we are on the verge of finalising. We could get around Rs 100-120 crore.
Ekta: What are these assets that you are looking to monetise about Rs 300-400 crore?
A: The sale of our pipe mill is almost at final stages. We have a multiple level car parking (MLCP) building, which we need to give on lease. Then we have an office, which we want to sell off, which will fetch us around Rs 50-54 crore. We also have land bank of around Rs 70-80 crore. All this will help us reduce our debt, which is our main agenda.
Nigel: Looking at your promoter holding for the last ended quarter, it has come down substantially, it appears that there is some regrouping and because of that in fact one of your promoters have been classified as non-promoter, could you take us through some details on that front?
A: We have been working through various numbers and trying to understand the right way to move forward. This is the right time to not only raise funds but also to grow. So, we are trying to analyse the right people for us. We are trying to rearrange the entire management, who will help us grow at a relatively good speed.
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