CEAT Limited has informed the Exchange regarding the Finance and Banking Committee meeting of the Board of Directors held on Jun 25, 2025.
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CEAT's Finance and Banking Committee approved three key items on June 25, 2025. First, the issuance of unsecured, listed, redeemable Non-Convertible Debentures (NCDs) of up to Rs. 500 crores on a private placement basis, with tenure up to 5 years and a fixed coupon rate to be determined via NSE's bidding platform; this is in addition to Rs. 250 crores of NCDs already issued. The proceeds will be used for capacity expansion capex, reducing overall interest costs, and refinancing high-cost debt. Second, capital infusion of up to Rs. 400 crores (in LKR equivalent) into wholly owned subsidiary CEAT OHT Lanka (Private) Limited to fund the ongoing acquisition of the Camso brand's off-highway construction equipment tyre and tracks business. Third, availing a credit facility of up to Rs. 1,000 crores for business purposes.
The Rs. 500 crore NCD issuance and Rs. 1,000 crore credit facility are aimed at lowering CEAT's overall borrowing costs and funding capacity expansion, which should support growth. The Rs. 400 crore infusion into the Sri Lanka subsidiary signals continued commitment to the recently announced Camso acquisition. Existing shareholders may see modest dilution risk only in the subsidiary's preference share component, while the debt instruments do not dilute equity.