Celebrity Fashions, a leading manufacturer of readymade garments, has decided to convert its debt into equity while issuing fresh shares to promoters/group and bring a new investor in Davos International Fund to come out of sickness.
The company became sick owing to weak global market conditions coupled with forex fluctuations. It was brought under the BIFR and in turn the bureau appointed SBI as an operating agency (OA) to prepare a rehabilitation/restructuring plan for the company to retire its debt and bring in fresh capital.
When contacted, S Suryanarayanan, managing director, CFL, said, the company decided to convert its R114 crore debt due to SBI and HDFC Bank (92% SBI and 8% HDFC) by issuing equity shares of R7.47 crore to SBI and another R1.53 crore equity shares to HDFC Bank.
Apart from that, the company will issue cumulative redeemable preferential shares of around R30.25 crore to both the banks (R25.10 crore shares towards SBI and R5.15 crore shares to HDFC Bank) at a price fixed as per SEBI rules. Currently, the trading price of the company is hovering around R5, he added.
“We are also bringing in a new investor called Davos International Fund, a FII, who would be issued fresh shares of around R2.10 crore apart from issuing fresh shares to promoters/group of around R1.40 crore. Everything is subject to the approval of banks as well as shareholders,” he said.
The company has called for an EGM on October 10 to get shareholders’ nod.