Lenders have option to convert debt into equity: Gammon

Nov 28 2013, 20:04 IST
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SummaryThe engineering firm's Corporate Debt Restructuring (CDR) package was approved on June 24, 2013.

Gammon India today said the debt restructuring related proposals, for which it has sought shareholders nod, are "enabling resolutions" and no such option has been exercised by any lender.

The engineering firm's Corporate Debt Restructuring (CDR) package was approved on June 24, 2013.

"As per the approved package the CDR lenders have the 'Option' to convert the restructured facilities into equity shares during the term of the CDR package.

"Hence the company is seeking shareholders' approval by way of a postal ballot providing for such an 'Option' to the CDR lenders. These are merely enabling resolutions and no such option has been exercised by any CDR lender," it said in a regulatory filing.

As per the enabling resolution, the company's board has approved converting restructured debt - worth Rs 14,814.17 crore - into equity, besides issuance of fresh shares worth more than Rs 4,500 crore.

The company scrip closed flat at Rs 13.72 on the BSE.

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