Southern Petrochemical Industries Corporation (Spic), the flagship company of AC Muthiah group, has got shareholders? nod to convert part of its debt into equity. Hence, the company has decided to allot a minority stake to a consortium of 10 lenders led by Central Bank of India.
The board of directors has decided to allot up to 44,05,259 equity shares on preferential basis to secured lenders at a face value of Rs 10 each.
This was done by converting company’s secured debt of Rs 8.37 crore at an issue price of Rs 19 per share, which includes a premium of Rs 9 per share. The conversion price of Rs 19 is at a discount of over 27.11% of the closing price of Spic on NSE at Rs 24.15 on Wednesday. The shares would be allotted to lenders including Central Bank of India, Canara Bank, State Bank of Patiala, Dena Bank, United Bank of India, Bank of Rajasthan, New India Assurance Company, Tamilnadu Mercantile Bank, State Bank of Hyderabad, and Bank of Baroda. The corporate debt restructuring (CDR) package, approved by the empowered group on February 24, 2010, has stipulated conversion of debt into equity by issuing fresh capital on a preferential basis to the lenders. The CDR package is sanctioned by Arcil and the main promoters, MA Chidambaram group, will pump in Rs 150 crore in the company’s equity, through their wholly-owned subsidiary Ficon Holdings, Mauritius by preferential issue.
Earlier, Asset Reconstruction Company (India) (Arcil) had converted Rs 30-crore outstanding debt of Spic it acquired from the lenders into 1.66 crore equity shares at Rs 18 per share including a premium of Rs 8 on a preferential basis. This translates into 12.72% of the total outstanding equity shares of Spic.