PC Jeweller Ltd plans to raise up to Rs 2,705 crore by issuing warrants on a preferential basis to its promoters and investors. This initiative is primarily aimed at settling bank loans and supporting working capital needs, with promoters expected to contribute around Rs 850 crore by subscribing to these warrants.
In a recent regulatory filing, PC Jeweller’s board approved the plan to raise the funds through a preferential issue of fully convertible warrants. The board has sanctioned the issuance and allotment of up to 48,13,42,500 fully convertible warrants via preferential allotment on a private placement basis to both the ‘promoter group’ and the ‘non-promoter, public category.’ These warrants will be issued at Rs 56.20 each, with 15 crore warrants designated for the promoter group.
An extraordinary general meeting (EGM) is scheduled for August 8, 2024, to seek approval from company members for this preferential issue. PC Jeweller has opted for a one-time settlement (OTS) for its outstanding dues with a consortium of banks. The terms of the OTS include cash and equity components under the settlement, along with the release of securities and mortgaged properties.
Earlier this month, Punjab National Bank (PNB) approved a one-time settlement for PC Jeweller’s outstanding dues. PNB is the third-largest bank in the consortium after the State Bank of India in terms of exposure. Details of the total outstanding dues and the specifics of the OTS were not disclosed by PC Jeweller.
In a late May investor presentation, PC Jeweller mentioned positive developments, including the withdrawal of a petition from the National Company Law Tribunal (NCLT) by SBI and favorable consideration of its OTS proposal by the banks. The company has resumed focusing on increasing its brand presence and marketing initiatives, which are already showing positive effects this quarter. As of March 31, 2024, PC Jeweller maintains a network of 60 showrooms (including six franchisee showrooms) in 44 cities across 15 states. The company’s core strengths, such as manufacturing and design capabilities, skilled staff, and customer policies, remain robust. The company is also working on various business improvements, including launching new jewelry collections, revamping its franchise business, and optimizing costs.
