Real estate developer and engineering firm Vascon Engineers plans to raise Rs 200 crore through rights issue and sale of non-core assets to cut down on its debt burden and meeting working capital requirements.
"We will be raising Rs 100 crore through rights issue and another Rs 100 crore through sale of non-core assets. We will utilise all the proceeds for repaying our debt and bring it down to less than Rs 200 crore," Vascon Engineers Managing Director R Vasudevan said.
The rights issue for raising Rs 100 crore has been oversubscribed by over 130 per cent. The promoters of the company infused Rs 60 crore through this issue, thereby increasing their shareholdings to 48.02 per cent.
The Pune-based construction company will use Rs 62 crore of the rights issue to repay its debt to bring it down from around Rs 335 crore to Rs 273 crore, while the remaining Rs 38 crore will be used mainly to fund its residential projects 'Windermere' and 'Ela' in the city.
The company plans to sell some of its non-core assets, like hotels, to raise the remaining Rs 100 crore.
"The proceeds from these sales will be used to further reduce debt to sub-Rs 200 crore level. This will also help in improvement of cash flows and performance. With the infusion of capital and the re-focus on our core business, we are back on the growth track," he said.
Vascon is also planning to enter the affordable housing market by launching a project in Pune, Vasudevan said.
The company has the construction capabilities to execute not only their own real estate projects but also third-party contracts.
In its engineering, procurement and construction (EPC) business, Vascon has a strong order book of around Rs 1,000 crore, most of which is to be executed in the next 24 months. These projects are located in various cities including Pune, Mumbai, Chennai and Lucknow.
Vascon's subsidiary GMP Tech Solutions, which specialises in manufacturing of fire doors, aluminum doors, clean room partitions, aluminum sections has touched a topline growth of Rs 250 crore.
