Den Networks pref issue to fund broadband expansion, pare debt-:- Equity Research

Den Networks ’ board on Tuesday approved preferential allotment of 1.58 crore shares at Rs 90 per share to Goldman Sachs. Sharing details of the issue with CNBC-TV18 CFO Manish Dawar said this will increase Goldman’s stake in the company to roughly 24.5 percent. Goldman has a seat on the company's board and will continue to hold it, he said. The issue totalling about Rs 142 crore will lead to equity dilution of about 8 percent and is expected to trim promoter stake in the company to 37 percent. Dawar said the funds raised through the issue will be used towards expansion of the broadband business and to pare debt. The company targets to limit its net debt to equity at 0.5 times, he said. Den’s current net debt-to-equity is at 0.3 times.