GHCL promoters buy back FCCBs at 60% discount

Our Bureau NEW DELHI

GHCL has bought back foreign currency convertible bonds (FCCBs) worth $11 million from overseas investors, out of FCCBs worth $80 million raised in 2005-06, to fund various expansions.
    GHCL director (finance) Raman Chopra said, “We are talking to other bond holders to buyback the remaining FCCBs, which will allow us to lower our interest outgo and improve debt-to-equity ratio.” The firm which is engaged in home textile and soda ash manufacturing, besides furnishing
retail, bought back a part of these
bonds at 60% discount funded through internal accruals.
The bonds which were to mature in
2011, carried an equity conversion price of Rs 147.9 per share as against Rs 35, the price at which GHCL scrip closed on BSE on Monday. Had the bonds converted into equity, it would have led to significant equity dilution.
    Meanwhile, the promoter group led by GHCL chairman Sanjay Dalmia is in negotiations to buy shares from few individual high net worth investors (HNIs) who own 5-6% in GHCL, two persons close to the company said.
    This is to boost promoters’ holding after it dropped from 38% of total equity (as on December 31, 2008) to 18% as on March 31, 2009. The drop in promoters holding is due to margin calls triggered on shares pledged with financial institutions.
    Sanjay Dalmia had recently told ET that he is in discussions with several shareholders who want to sell their stake. Promoters acquiring more than 5% in their firm within a year are required to make an open offer.
    But, if GHCL promoters spread out the share purchase to more than one year, they will not be required to make such an offer. At the ruling market price, it would cost the Dalmias around Rs 18 crore to acquire up to 5%.

 

 

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