Everest Kanto Launches FCCB Issue

Everest Kanto Cylinder Ltd has announced that the Company has launched the US$ 35 million Foreign Currency Convertible Bonds Due 2012 (the "Bonds") for import of plant and machinery for its operations in India, for making investments in its subsidiaries / joint ventures outside India, for potential acquisitions outside India and for such other purposes in compliance with the applicable guidelines issued by the RBI and the Government of India. The Bonds will be convertible into the Company ordinary shares, quoted in Indian Rupees ("Rs").

The Bonds are expected to be zero coupon, carry a yield to maturity of 7.25% per annum and the conversion price is expected to be set at a premium of 30% over the closing share price of Rs 233.35 of the Company on the Bombay Stock Exchange on October 01, 2007. The initial conversion price is fixed at Rs 303.36 per share ("Initial Conversion Price") in accordance with the relevant pricing norms prescribed by the Ministry of Finance, Government of India.

Bonds also carry a reset feature. The reset feature will become active on October 09, 2008. On the Reset Date, If the Average Market Price for 20 consecutive Trading Days immediately prior to October 09, 2008 (the "Reset Date") is less than the Conversion Price on the Reset Date, the Conversion Price shall be adjusted on the Reset Date to the prevailing share price, subject to higher of SEBI floor or 85% of the initial Conversion Price.

The Bonds will be issued at par and redeemed at 142.8010% of par on maturity. The Bonds also carry a Mandatory Conversion feature at the option of the issuer. On or at any time after October 09, 2010 (3 years) the Issuer may require a mandatory conversion of the Bonds in whole but not in part into Shares, provided that no such mandatory conversion may be made unless the Closing Price of the Shares (translated into U.S. dollars at the Prevailing Exchange Rate) for each of the 30 consecutive Trading Days prior to the date upon which notice of such mandatory conversion is given, is at least 130% of the applicable Early Redemption Amount divided by the applicable Conversion Ratio.

The Bonds have been priced today and closing is expected on or about October 10, 2007. The Singapore Stock Exchange has given in-principal approval for the listing of the Bonds. Citigroup Global Markets is the Sole Lead Manager for the offering.

Source : Equity Bulls

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