Kishore Biyani’s FMCG business Future Consumer Ltd on Saturday said that its board had approved raising up to Rs300 crore through a rights issue.
Future Consumer sells over 30 brands across packed foods, beverages, staples, personal and home care categories.
The company is yet to decide the pricing of the rights issue and the number of shares that existing shareholders will be eligible to subscribe to under the rights issue.
Biyani and his family own 45.32% of the company, which means that they will have to bring in at least Rs135 crore as part of the rights issue.
The plans to raise funds in Future Consumer comes at a time when Biyani’s business empire has been reeling under the pressure of high debt levels, which has been exacerbated by the nationwide lockdown that has impacted the cash flows of his businesses.
On 4 May, rating agency Icra downgraded Future Corporate Resources, a promoter group entity belonging to Biyani, to D, after it defaulted on coupon payments.
“Despite monetisation of investments across various group entities, the total group debt has increased as on 31 December 2019, as against 31 March 2019…total debt at group’s listed firms rose to ₹12,778 crore as on 30 September 2019 from ₹10,951 crore as on 31 March 2019,” Icra added.
The debt pressure has led Biyani to seek buyers for several of his businesses such as the group’s logistics business Future Supply Chain Solutions Ltd and the group’s stake in an insurance joint venture.
