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Shrenuj Nears Debt Deal to Ease Liquidity Crisis
Nov 29, 2016 3:42 AM
By Rapaport News
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RAPAPORT...
Shrenuj & Co. is close to securing at least $100 million in “long-term” funding
from an unidentified institutional investor to ease the beleaguered company’s debt
crisis.
The diamond and jewelry manufacturer will deploy the timely external
financing to relieve pressure on liquidity, a source close to the talks told Rapaport
News. Mumbai-based Shrenuj is in the final stages of preparing the financing
deal, which is expected to be announced in mid-December.
Shrenuj has bank debts to the tune of $450 million, of
which $35 million is overdue, the source said. A strain on liquidity has forced
the company to downscale its diamond-cutting operations in Botswana while it also had its De Beers sightholder status suspended in
July.
The company is “not repaying banks but bringing in fresh
money to support growth and regularize the bank lines that have been impacted
by slow recoveries from customers,” the source told Rapaport News in an email.
About a third of the funds will be used to “regularize" the lines
of bank credit, which have been hit by delays in payments from Shrenuj’s
customers. The rest will go toward restoring operational normalcy, including the
manufacturing facilities, and business growth, the source said.
The company expects operations in Botswana will return to
normal after the Christmas and New Year holiday season, Vishal Doshi, Shrenuj’s
executive director, had said last week. That assumes the company manages to reach
an agreement with De Beers to resume its supply of rough diamonds, Doshi
pointed out.
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Tags:
Botswana, Debt, India, Manufacturing, mumbai, Rapaport News, Shrenuj, Shrenuj & Co, Vishal Doshi
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