Vascon Engineers, a diversified entity having interests in real estate development, plans to raise Rs 2 billion to reduce the company's debt.

The company said, "We have raised Rs. 1 billion through a rights issue. The rights issue was subscribed by over 130%."

"Besides the amount raised through rights issue, the company will also raise another Rs. 1 billion through the sale of its non-core assets like hotels etc. The proceeds from these sales will be used to further reduce its debt to sub Rs. 2 billion levels. This would also help the company to improve its cash flows and its performance," it added

The promoters of the company infused Rs. 600 million through this issue, thereby, increasing the promoter shareholdings to 48.02%.

R. Vasudevan, MD, Vascon Engineers said, "With the infusion of capital and the re-focus on our core business, we are back on the growth track. Our GMP business has been growing exceptionally well and we are extremely proud of the team."

The company said that, From Rs 1 billion raised through rights issue, Rs. 620 million will be used for repaying debt thus bringing down the debt level from Rs. 3.35 billion to Rs. 2.73 billion. The remaining Rs. 380 million will be used to drive residential projects.

Vascon has a strong order book of approx. Rs 10 billion, which is to be executed in the next 24 months. GMP Tech Solutions, a subsidiary of the company, manufacturing fire doors, aluminium doors has a revenue of Rs 2.5 billion.

Shares of the company declined Rs 0.05, or 0.21%, to trade at Rs 23.25. The total volume of shares traded was 384,227 at the BSE (11.12 a.m., Thursday).