Blue Star Limited on Tuesday announced that upon successful completion of the qualified institutions placement (QIP) vide the Placement Document dated September 22, 2023, the Company, as a part of the objects of the said QIP, has acquired 4,90,00,000 equity shares of Rs.10 each at par aggregating to Rs 49 crores by way of subscribing to the rights issue of Blue Star Climatech Limited, the wholly owned subsidiary of the Company (BSCL), the company announced through an exchange filing.
BSCL was incorporated under the Companies Act, 2013 on May 17, 2021 as a wholly owned subsidiary of the Company. BSCL is currently engaged in the business of manufacturing of all kinds of air conditioners, commercial refrigeration equipment, cooling appliances and other related products.
The turnover of BSCL for the financial year ended March 31, 2023 is Rs 13,937.51 lakhs.
BSCL, being a wholly owned subsidiary is a related party of the Company. The transaction falls within ambit of related party transactions and is at arms’ length. Except to the extent of shares held by the Company in BSCL, the promoter/promoter group/group companies of the Company have no interest in BSCL.
Industry the entity acquired belongs
Manufacturing of all kinds of air conditioners, commercial refrigeration equipment, cooling appliances and other related products.
Objects and effects of acquisition
This investment is part of the Use of Proceeds as specified in Placement Document dated September 22, 2023 relating to QIP.
This investment will help BSCL inter alia in repayment / pre-payment, of certain outstanding borrowings and financing the cost towards its expansion plans.
Cost of acquisition
Rs 49 crores comprising of 4,90,00,000 equity shares of Rs. 10 each, at par.
Percentage of shareholding
There will be no change in shareholding of the Company in BSCL. BSCL will continue to remain a 100 percent wholly owned subsidiary of the Company.