PC Jeweller to Issue 5.17 Crore Shares to Settle Bank Loans
PC Jeweller Ltd’s board has approved the issuance of over 5.17 crore equity shares to a consortium of lenders, including the State Bank of India (SBI), as part of a one-time settlement (OTS) to address its outstanding debt.
In a regulatory filing on Wednesday, the company stated that it would issue 5,17,11,462 equity shares to the consortium under a preferential allotment on a private placement basis. The shares will be allocated to lenders categorized as ‘Non-Promoter, Public Category’, at a price higher than the floor price.
Details of the Settlement
The OTS agreement includes a combination of cash and equity payments to settle dues. It also involves the release of securities and mortgaged properties tied to the company’s debts.
In May, PC Jeweller highlighted positive developments, including the withdrawal of an insolvency petition by SBI from the National Company Law Tribunal (NCLT) and the acceptance of its OTS proposal by banks.
Business Strategy and Outlook
The company has been focusing on rebuilding its brand presence and increasing marketing efforts. In an investor presentation earlier this year, PC Jeweller noted a visible impact of these initiatives in recent quarters.
As of March 31, 2024, the company operated 60 showrooms, including six franchise outlets, across 44 cities in 15 states.
Fundraising Plans
In July 2024, PC Jeweller announced plans to raise up to ₹2,705 crore through the issuance of warrants on a preferential basis. The funds are primarily intended for settling bank loans and meeting working capital requirements.
According to Managing Director Balram Garg, 75% of the raised funds will be used to repay bank loans, while the remaining 25% will support working capital needs.
This move is expected to strengthen PC Jeweller’s financial stability and pave the way for future growth.