PC Jeweller to raise Rs 2,705 Cr via warrants

PC Jeweller Ltd plans to raise up to Rs 2,705 crore by issuing warrants on a preferential basis to promoters and investors, mainly to settle bank loans and for working capital requirements.

Promoters will infuse around Rs 850 crore into the company by subscribing to warrants issued by the company.

In a regulatory filing on Saturday, PC Jeweller informed that its board has approved the proposal to raise funds up to Rs 2,705.14 crore by preferential issue of fully convertible warrants.

"The funds will be utilised primarily for settlement of bank loans. Around 75% of the fund will be used for repaying bank loans and the rest 25% for working capital requirements," PC Jeweller MD Balram Garg told PTI.

He said the promoters would infuse Rs 850 crore into the company, while the remaining amount would be raised from investors.

According to the filing, the board approved the issuance and allotment of up to 48,13,42,500 fully convertible warrants by way of preferential allotment on a private placement basis to 'promoter Group" and 'non' promoter, public category'.

These warrants are proposed to be issued at Rs 56.20 apiece.

Out of the total warrants, the proposal is to issue 15 crore warrants to the promoter group.

An extraordinary general meeting (EGM) of the company will be held on August 8, 2024, to seek the approval of members of the company for the proposed preferential issue.

PC Jeweller has opted for OTS (one-time settlement) for its outstanding dues with a consortium of banks.

The terms and conditions of approved OTS include cash and equity components payable under the settlement, release of securities and mortgaged properties, etc.

Earlier this month, PC Jeweller informed that Punjab National Bank (PNB) has given its approval for a one-time settlement of outstanding dues.

PNB is the third largest bank after State Bank of India among consortium banks in terms of its exposure.

PC Jeweller did not mention the total outstanding dues with all banks, and also the details of the OTS.

In an investor presentation in late May, PC Jeweller mentioned that the withdrawal of the petition from the National Company Law Tribunal (NCLT) by SBI and favourable consideration of its OTS proposal by the banks are positive developments.

"The company has again started focusing on increasing its brand presence and has started its marketing initiatives for the same, which is having a visible impact in the ongoing quarter," it had said.

The company continues to maintain a wide network of 60 showrooms (including 6 franchisee showrooms) located in 44 cities spread across 15 states as of March 31, 2024.

"Also, the core strengths of the company in the form of manufacturing and designing capabilities, manufacturing facilities, skilled staff, soft skills in the form of systems and procedures, customer policies, etc. remain intact," PC Jeweller said.

As per the presentation, the company is also revamping all other aspects of its business operations like preparing to launch new jewellery collections, revamping its franchisee business, and cost optimisation, among others.