Shree Renuka Sugars Vice Chairman and MD Narendra Murkumbi quits

Narendra Murkumbi, founder promoter of Shree Renuka Sugars Ltd (SRSL), has resigned as vice-chairman and managing director after foreign partner Wilmar International increased its stake in the company to 39 per cent from 27 per cent. Wilmar will now have to make an open offer at Rs 16.29 per share, 5 per cent higher than Friday’s closing price.

Wilmar first picked up stake in Shree Renuka Sugars four years back at Rs 20.08 per share. The company’s board has accepted Murkumbi’s resignation. 

Murkumbi will continue to retain his post till the stipulated notice period of 90 days or completion of open offer by Wilmar, whichever is later. “On completion of these transactions and allotments, however, our stake would come down to 13.43 per cent,” Murkumbi told Business Standard. As of December 31, 2017, Shree Renuka Sugars had a consolidated loan book of Rs 98.75 billion. The company is the largest sugar refiner in India and sells both packaged and loose sugar. In February 2014, Wilmar International Ltd announced the acquisition of 27.24 per cent equity shares in Shree Renuka Sugars at an investment of $83 million through its 100 per cent subsidiary Wilmar Sugar Holdings (WSH). Wilmar Sugar Holdings has announced a total investment of $200 million, including acquisition of additional stake and rights issue. The terms of agreement also gave Wilmar Sugar Holdings options to receive allotment of 481.84 million, 0.01 per cent, preferences shares at a price of Rs 16.27 per share, which can be converted into equity shares. Last month, the Competition Commission of India had approved the company’s acquisition of additional stake in Shree Renuka Sugars. 

“WSH has exercised its options to convert all the CCPS (compulsorily convertible preferences shares) into equity shares of SRSL. Further, as part of the implementation of a debt restructuring package entered with SRSL and its lenders, lenders have converted a part of SRSL’s outstanding bank debts into common equity shares of SRSL. As the result of the allotment of common equity shares to WSH and SRSL’s lenders, WSH’s shareholding in SRSL’s equity share capital has increased from approximately 27 per cent to 39 per cent,” Wilmar International said in a filing to the Singapore Exchange Ltd on Friday.

An email sent to Wilmar International’s Singapore office remained unanswered. Shree Renuka Sugars’ shares closed down 0.32 per cent to Rs 15.50 a piece on the Bombay Stock Exchange on Friday. Shree Renuka Sugars has issued 489.73 million equity shares at a price of Rs 16.28 per share.

In 2010, Shree Renuka Sugars acquired 59.4 per cent stake in Renuka do Brasil SA from Grupo Equipav for Rs 13.13 billion and 100 per cent stake in Renuka Vale do Ivai for Rs 4.53 billion. In July 2015, Renuka do Brasil along with its subsidiaries filed for bankruptcy in Brazil.