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Ricoh India Gets Large Cash Infusion From Japan Corporate Office to help wipe out financial fraud revealed by the company in July 2016.
By Soumeet Sarkar.
After a capital infusion of Rs 1,123 crore, Ricoh India may now look to raise an additional Rs 700 – 800 crore for its working capital requirements. People with knowledge of the matter told BloombergQuint that the company may consider raising these funds by mid-November via non-convertible debentures or bonds from the parent company Ricoh Ltd.
Ricoh India just received Rs 1,123 crore from its Japanese promoter, after minority shareholders approved the recapitalisation scheme in an extraordinary general meeting (EGM) on October 14. This amount is expected to help wipe out the estimated loss due to a financial fraud revealed by the company in July 2016.
At the EGM, Ian Winham, the recently appointed chairman of Ricoh India said the capital infusion will be used to repay debt and aid the company to re-start operations. But he also added that despite the debt repayment, Ricoh India will continue to hold a significant amount of debt.
For the half year ended September 2015, Ricoh recorded an earnings before interest and tax (EBIT) loss of Rs 87 crore and had an interest cost of Rs 49 crore. At the time its total debt stood at around Rs 1,400 crore, a couple of hundred crore more than the funds raised via the capital infusion.
When asked to confirm whether it is looking to raise Rs 700-800 crore in fresh debt, the company, in an email response, denied any immediate fund raising plans.
"With this capital infusion, we will be working to ensure stability and future success of Ricoh India. Working capital management will remain a key focus, but at this time, there are no fund raising plans to announce. Ricoh India Spokesperson"
Over the last one year Ricoh India has delayed quarterly filings and its auditors have red flagged several accounting irregularities, leading to a forensic audit, the suspension of top officials and a police complaint lodged by Ricoh India against its own officials, including the former CEO. In an interview to BloombergQuint, the former CEO Manoj Kumar denied any involvement in the fraud.
http://www.bloombergquint.com/markets/2016/10/17/ricoh-india-said-to-raise-additional-debt
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