Is it true that they 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?
Yes, for that 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 Rs 200 crore level. This will also help in improvement of cash flows and performance of the company.
As per the Company's director, R Vasudevan, company is also planning to enter into the affordable housing market by launching a project in Pune. The company has the construction capabilities to carry out not only their own real estate projects but also 3rd party contracts.
As per the R Vasudevan, in its engineering, procurement and construction business, Vascon has a strong order book of around Rs 1000 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.
The rights issue for raising Rs 100 crore has been over subscribed by over 130%. The promoters of the company fill Rs 60 crore through this issue, thereby increasing their shareholdings to 48.02%.
Because of this, shares of Vascon Engineers are trading higher by 2% after the company decided to raise Rs 200 crore