CEAT to infuse ₹400 crore into Sri Lankan arm, raise up to ₹500 crore via NCDs

Tyre manufacturer CEAT announced a capital infusion of up to ₹400 crore in its wholly-owned Sri Lankan subsidiary, CEAT OHT Lanka (Private) Limited, and said it plans to raise as much as ₹500 crore through unsecured non-convertible debentures (NCDs) via private placement.

The capital infusion will be carried out in one or more tranches through equity and/or preference shares, the company said in a regulatory filing. The investment will partly fund CEAT’s ongoing acquisition of the off-highway construction equipment tyre and track business of the Camso brand, the company noted. CEAT OHT Lanka was recently incorporated and is yet to begin commercial operations.

Separately, CEAT’s board approved a plan to raise up to ₹500 crore via rated, listed, unsecured redeemable NCDs, with a tenure not exceeding five years. The debentures will be issued in one or more tranches and are proposed to be listed on the wholesale debt market segment of the Stock Exchange (NSE).

The funds raised through NCDs will be used for general corporate purposes, including capacity expansion, refinancing of high-cost debt, and meeting working capital requirements. This is in addition to ₹250 crore in NCDs already issued by the company.

CEAT also received board approval to avail of a credit facility of up to ₹1,000 crore for business purposes in one or more tranches.

The shares of CEAT ended 2.42% higher on the BSE on Wednesday (June 25).

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