Shringar Cinemas mops up $20 mn via FCCBs

Shringar Cinemas has raised $20 million (approximately Rs 90 crore) through a foreign currency convertible bonds (FCCB) issue with a tenure of five years. The bonds are expected to be listed on the Singapore Stock Exchange.

The conversion of bonds have been structured so that 60 per cent of the proceeds would get converted into equity shares at 32 per cent premium (Rs 90 per share) and the balance $8 million at a premium of 57 per cent (Rs 107 per share) to Friday's closing price of Rs 68.

The bondholders will be able to exercise the option of converting into equity shares after 30 days of allotment. The bonds carry a coupon in the range of 0-0.5 per cent and a year to maturity of 6.5-7.5 per cent. Rabo Bank International was the sole manager and advisor to the issue.

Shringar Cinemas is expanding and will increase the number of multiplexes to 47 comprising 51,000 seats over the next 3 years. At present, the company has 5 multiplexes. The proceeds from the float will be utilised for expansion and modernisation of multiplexes and food court businesses.

Shravan Shroff, managing director, Shringar Cinemas, said, "We are encouraged with the response we have received. The funds from the float will be used to finance the aggressive growth in the multiplex as well as the food court business. We decided to take the FCCB route as it does not dilute the promoter's stake immediately."