More importantly, the combined debt will fall by 46% to Rs 3,300 crore. The Indian stand-alone company’s debt is to be repaid through internal accruals. $300 million of contingent liabilities will also be removed from the balance sheet.
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The transaction was completed at a calculated value of 11.7 times for the new entity. Jain International will hold a 22% stake in the new company, while the remaining 78% will be held by Rivilus.
The total deal of this entity is set at Rs 4,200 crore, where the debt repayment of Rs 2,700 crore will be there while the rest of Rs 1,300 crore will be in cash for Jain International. The Indian self-parent will receive Rs 200 crore in the form of receivables.
The stock has already risen 30% in the past two sessions. However, the stock is down more than 80% since hitting its all time high in 2010. Rising debt, corporate governance issues and delays in government orders have impacted this title.