Troubled Indian brewer Bira 91 has suceeded in raising at least INR 850 million (USD 9.9 million) through a heavily discounted rights issue

New Delhi-headquartered B9 Beverages, the maker of Bira 91 beer, is in the process of a rights issue while the company implements stringent cost-cutting measures and a shift in its manufacturing strategy.

B9 originally launched an INR 1 billion rights issue on May 27th, offering 3.1 million equity shares at INR 325 each, with an initial closing deadline of June 16th (with the ability for the firm’s board to extend).

Mint has reported that the brewer has succeeded in raising INR 850 million so far and is hoping to have the remaining INR 150 million raised during July.

This reperesents a steep 55% discount to the INR 718 paid by Japan’s Kirin Holdings in a previous funding round, a signal of the struggles the firm is facing.

Asia Brewers Network had previously reported in April on the Indian firm’s issues with disgruntled former employees and falling sales.

The company is under financial pressure and has already seen a workforce reduction from about 975 to 500 employees.

The rights issue comes at a time when the company is alleged to have delayed salary payments, delayed interest payouts amidst “liquidity issues” and struggled with meeting its tax liabilities across several states and funding its operational restructuring

According to the Offer Letter published on the the firm’s website, the proceeds will be split evenly for working capital to “boost the topline (sales) of the Company” and for general corporate purposes.

More than 300 investors have participated in the offer, including a large family office investing in the company for the first time, according to local financial media reports.

Existing shareholders were eligible to subscribe to one share for every seven held. B9 Beverages currently has about 6,500 private investors.

As part of its restructuring, B9 is shifting from in-house manufacturing to a distribution-led model, relying on contract production at four breweries.

Only its Gwalior and Nagpur facilities remain under direct operation and the company has also reduced its manufacturing capacity from about 25 million to 15 million cases.

B9 said the changes it is introducing are projected to reduce its factory overheads by nearly 50% and claims they will generate annual savings of up to INR 6 billion.

It is also expecting its fixed costs to decline by about INR 20 billion this financial year compared to the previous year.