Mumbai, March 28 : Ispat Industries Limited (ILL) has appointed ANZ Securities (UK) as financial advisors to restructure its Euro Convertible Bonds (ECB). The company had raised an amount aggregating $125 million by issue of ECBs. These bonds are redeemable on April 1, 2001.ILL has started discussions with its ECB holders for restructuring of outstanding bonds, a company press release said. In an official statement, IIL says that, it intends to restructure the ECBs and appointment of ANZ is the first step in the process. The company press release said that it has already initiated talks and discussions with these bond holders.
Based on the discussions and feedback received from the bondholders, a suitable formal restructuring plan will be drawn up and forwarded to the bond holders for their consideration.
The Bankers trust, trustee to ILL $215 million ECBs, had called a meet of bond holders in London, to discuss the restructuring the outstanding bonds. Currently, only $2.8 million of the bonds have been converted into equity. The remaining amount is unlikely to be converted, given the high conversion price of Rs 67 a share. The company's task ahead will be to seek a rollover of the bonds.
The company recently restructured its debts by conversion of a part of equity into preference shares. The existing equity base of the company, ie Rs 692.57 crore was written down by 50 per cent and the existing shareholders, would be issued 0.01 per cent cumulative redeemable preference shares in lieu of the write down of equity. IIL has also converted Rs 510 crores of the rupee debt for HR Coil Project into equity (Rs 310 crores) and Non Cumulative Convertible Preference shares (Rs 200 crores) (NCCPS) with effect from April 1,2001. NCCPS would be redeemed by way of conversion into equity on March 31,2003 at a premium of 28 per cent. The interest rate on all Rupee Loan of (RL)/Funded Interest Term Loan (FITL)/Non Convertible Debentures (NCD) of the company, including HR Coil project, would be reduced from existing document rates which is approx 17 per cent to 14 per cent per annum, with effect from April 1, 2001. Fifty per cent of the total differential interest over the tenure of the loans to be discountedand the Net Present Value (NPV) would be converted into 14 per cent Optionally Fully Convertible Debentures (OFCDs).
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
