Bharat Wire Ropes Ltd exploring ways to secure funding for purchase of CCPS from banks

Bharat Wire Ropes Limited ("the Company") had entered into a Restructuring Plan/Resolution Plan with Bankers in the year 2020-21 under Reserve Bank of India (Prudential Framework for Resolution of Stressed Assets) Directions 2019 ("RBI prudential norms"). Pursuant to the said resolution plan, the company had issued Compulsorily Convertible Preference Shares ("CCPS") to the bankers/lenders. Necessary special resolutions to this effect were passed in the Annual General Meeting of the Company dated September 15, 2020 ("AGM/the said AGM").

The management of the Company is currently exploring and evaluating the options with various investors, including HNI and Asset Reconstruction Companies, to secure funds for the purchase of CCPS based on request from some of the bankers to get early exit from such long tenure instruments.

The banks are considering to sell these long-term instruments that were initially issued at a coupon rate of 0.01% for total 20 years tenure. As per terms of the issue, banks have to sell to the management or wait up to 20 years to convert into equity at that time prevailing market price as per SEBI/RBI guidelines.

The management of the company is exploring the options to get funds from investors/other sources to purchase CCPS equal to NPV value of said CCPS discounted based on current interest rate for such unsecured instruments.

Shares of Bharat Wire Ropes Limited was last trading in BSE at Rs. 191.70 as compared to the previous close of Rs. 195.95. The total number of shares traded during the day was 63145 in over 1686 trades.

The stock hit an intraday high of Rs. 199.50 and intraday low of 189.80. The net turnover during the day was Rs. 12296891.00.

Source : Fortis Securities

Keywords

BharatWireRopes INE316L01019 Options Evaluation CCPS Purchase Banks