The board of directors of Blue Star Ltd. has approved the issuance of non-convertible debentures (NCD) of up to ₹500 crore through private placement with investors.
Based on this, the company plans to issue NCDs amounting to ₹300 crore in the near term to primarily finance working capital and capital expenditure requirements.
Vir S. Advani, vice chairman and MD, said, “We have always met our working capital as well as capital expenditure requirements by and large through internal accruals. The current lockdown, especially during the peak summer season, has impacted our cash flow and consequently, the working capital cycle is likely to get lengthened.”
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“We foresee demand revival from the second half of the financial year, and it is important to persist with capital expenditure pertaining to indigenisation and backward integration programmes to enhance our competitiveness and market leadership,” he said.
“Therefore, it is prudent to infuse additional funds through the issuance of NCDs in order to retain adequate liquidity to support business continuity and growth over the next 12 to 18 months,” he added.