Religare Enterprises shareholders have approved a proposal to invest up to 500 crore in its arm Religare Capital Markets for repaying debt related to Mauritius business, and capital needs of India business.
The shareholders have given their approval to an ordinary resolution through postal ballot, the company said today in a regulatory filing.
As per the voting result, 55.63 per cent shareholders voted in favour of the proposal, while the remaining 44.36 per cent were against it. The voting result also showed that 99.95 per cent of total votes casted by public institutional shareholders were against the resolution. Promoters did not participate in voting. However, 99.03 per cent of the public non-institution shareholders who participated in the voting were in favour of the proposal.
The voting was closed on September 9.
In the postal ballot notice issued in July, Religare Enterprises had said that it proposes to make further capital investment of up to 500 crore in Religare Capital Markets (RCML).
Religare Enterprises will use part of sale proceed from divestment of its health insurance business to make investment in RCML. It further said that RCML subsidiary Religare Capital Market International, Mauritius Ltd (RCMIML) had availed ‘standby letter of credit facility’ (SBLC) of $72.5 million from Axis BankBSE 0.97 % in 2014.
The Mauritius arm had drawn down $70 million from Axis Bank, Hongkong against SBLC facility.
“The SBLC facility is falling due for repayment. Since RCML and RCMIML are in losses and have negative cash flows, they need support from the holding company, which is Religare Enterprises Ltd,” the July 26 notice said.
To repay the SBLC facility at RCMIML level, Religare Enterprises said it will capitalise RCML, which in turn further capitalise RCMIML to repay the Axis Bank loan.
RCML also need additional fund for its India business, the notice said, explaining the rationale behind infusion of up to 500 crore.
Shares of Religare Enterprises closed at Rs 42.40, up 4.95 per cent on BSE.
Source: Economic Times