Alok Industries converts 647 FCCBs into shares

Alok Industries Ltd has with reference to the 1% Unsecured Foreign Currency Convertible Bonds (FCCB) issue of USD 70 million divided into 1400 FCCBs of USD 50,000 each aggregating to USD 70 million of the Company launched in May and June 2005, that out of the above referred 1400 FCCBs, 647 FCCBs have been converted into equity shares as on date, leaving an outstanding balance of 753 FCCBs.

Clause 5.2.3 of the Term and Conditions of the FCCBs of the Offering Circular stipulates Mandatory Conversion at the Option of the Company in case of (a) a maximum of one third of the B Bonds held by such B Bondholder into Shares if the Market Price, translated into US Dollars at the Prevailing Rate as defined in the Offering Circular, has equalled or exceeded 140% of the B Conversion Price for any 10 consecutive Trading Days ("First Mandatory Conversion Option"), the last of which occurs not more than 10 days prior to the date upon which notice of such option is published, and subsequently (b) a maximum of half of the B Bonds held by such B Bondholder if the Market Price, translated into US Dollars at the Prevailing Rate, has equalled or exceeded 150% of the B Conversion Price for any 10 consecutive Trading Days ("Second Mandatory Conversion Option"), the last of which occurs not more than 10 days prior to the date upon which notice of such option is published, and subsequently (c) the balance of the B Bonds held by such B Bondholder if the Market Price, translated into US Dollars at the Prevailing Rate, has equalled or exceeded 160% of the B Conversion Price for any 10 consecutive Trading Days ("Third Mandatory Conversion Option", each of the First Mandatory Conversion Option, Second Mandatory Conversion Option and Third Mandatory Conversion option, a "Mandatory Conversion Option"), the last of which occurs not more than 10 days prior to the date upon which notice of such option is published.

The Market Price of the Shares, as per the terms of the Offering Circular, was above 140% of the Conversion Price for 10 consecutive days from the 26th of December till the of January 08, 2008 thus triggering the mandatory conversion of 1/3rd of the outstanding FCCBs. The Market Price of the shares was also 150% of the Conversion Price for 10 consecutive days from the 27th of December till the January 09, 2008 thus triggering the mandatory conversion of a maximum of 1/2 of the balance outstanding FCCBs too. Thus 2/3rds of the outstanding FCCBs are also liable to be converted as per the provisions of Clause 5.2.3 of the Offering Circular.

The Company have exercised the option of mandatory conversion of 2/3rd of the total outstanding FCCBs and informed the Registrar, Paying and Conversion Agent and Listing Agent to accordingly notify the above to the Bondholders.

Source : Equity Bulls

Keywords