Religare Enterprises to raise Rs 570 cr via preferential shares

NEW DELHI: Financial services player (REL) on Monday said its shareholders have approved a proposal for raising Rs 570 crore via preferential issuance of shares to a clutch of investors, including existing shareholders, to fund its business plans.

The company would issue 5.41 crore shares at a price of Rs 105.25 per unit to existing shareholders like Burman family (Dabur Group), Ares SSG Capital and selected new marquee investors, Religare Enterprises said in a statement.

The proposal was cleared by shareholders in the Extraordinary General Meeting (EGM) of the company held on Saturday, July 3.

A part of the fund would be utilised for the proposed debt recast of its subsidiary Religare Finvest Ltd, which is under the corrective action plan of the Reserve Bank of India (RBI) since January 2018 due to its weak financial health.

The company has been in financial distress due to alleged misappropriation of funds by erstwhile promoters Shivinder Singh and his brother Malvinder Singh. Multiple investigative agencies are probing the case of financial bungling of about Rs 4,000 crore.

Commenting on the decision of the EGM, REL Chairperson Rashmi Saluja, “We are well on our path of revival and would use these funds towards growth of our businesses. Today again, I am thankful to our shareholders and investors, who demonstrated their trust in Company by passing the special resolution with resounding majority.”