The FCCBs carry a conversion price of Rs 480.68 per share, representing a premium of 50% to the closing price of the RCoVL share on Tuesday.
The bonds have a maturity period of five years and one day, and are zero coupon FCCBs, carrying a yield to maturity (YTM) of 4.65% per annum, which reflects competitive pricing of LIBOR minus approximately 50 basis points. The FCCBs are expected to be listed on the Singapore Stock Exchange.
After the FCCBs are converted to equity, the share capital of the company would increase by approximately 4.62 crore equity shares of Rs 5 each, which would represent around 2% of fully-diluted equity share capital, post the recently announced re-organisation of the RCoVL group.
RCoVL maintains a conservative financial profile, and its net debt to equity ratio, as per consolidated proforma financials, is less than 0.33:1, a release from the company said. Deutsche Bank is the sole bookrunner for the transaction.
The company is Indias second largest cell phone operator. The fund will be utilised for expansion in the worlds sixth-largest cell-phone market by subscribers. Morgan Stanleys industry view titled Indian Telecoms raised it wireless subscriber estimates for India from 152.7 million to 159 million as of March 2008 (up 4%).
The share price of RCoVL closed at Rs 300.20, down 6.32%, on a day when the Sensex lost 63.85 points. RCoVL has interests in telecommunications, broadband and other related wireless businesses.