GV Films not to redeem FCCBs

GV Films Ltd has announced that the Board of Directors of the Company at its meeting held on March 10, 2009, inter alia, considered the put option exercised by bondholders of "US$ 4,500,000 2.25 percent Coupon Convertible Bonds due 2011."

The Board also considered the legal opinion received from M/s. Rugan & Arya, Legal Advisors to the Company as to Indian law the Bond issue on the subject.

Clause 9.1 of the terms and conditions of the bond relating to the put option reads as under; "REDEMPTION, PURCHASE AND CANCELLATTON : Redemption at the Option of the Bondholders : On April 19, 2009 Issuer may redeem whole or in part the Bonds, at the option (Put Option) of the Bondholders at 118% of the principal amount."

The Board after discussion concluded that since it is optional on the part of the Company to redeem or not to redeem and, considering the legal opinion received on the subject, the Board has decided not to give effect to the put option exercised by the bondholders.

As a result the bonds shall continue to be in existence and will be redeemed on the maturity date on April 19, 2011.

The Board also discussed about the Notice of Default received from Bank of New York, London, Trustees to the bondholders for the issue of "USS 4,500,000 2.25 percent Coupon Convertible Bonds due 2011." and the issue of "Euro 9,000,000 Zero Coupon Unsecured Convertible Foreign Currency Bonds - due 2012 (Partly paid-up to the extent of 34% only).

The Board after discussion noted that there is no event of default as set out in the notice and have decided to reply accordingly.

Source : Equity Bulls

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