The share price of Shilpi Cable Technologies hit lower circuit for the 15th consecutive session on Wednesday after an overseas lender filed a petition against the company under the Insolvency and Bankruptcy Code, 2016.
The share price of Shilpi Cable Technologies hit lower circuit for the 15th consecutive session on Wednesday. The stock has eroded by 73% on a closing basis in the last 17 trading sessions, dropping from Rs 225.60 on 20 April 2017 to Rs 60.90 on 16 May 2017. A major reason for this drastic fall in the stock price was an overseas lender filing a petition against the company under the Insolvency and Bankruptcy Code, 2016.
The company in a filing to the stock exchanges dated 30 April 2017 has said, “An overseas bank has filed a petition against Shilpi Cable before the National Company Law Tribunal (NCLT), under Section 8 & 9 of the Insolvency and Bankruptcy Code, 2016.” The company on 5 May 2017 had informed the stock exchanges that NCLT, New Delhi, has reserved its order on the petition filed under Section 8 & 9 of the Insolvency and Bankruptcy Code, 2016.
Trading in the stock has been frozen for the day as it plunged by 5 percent to Rs 57.90. There are pending sell orders for a total of 66,97,409 shares on BSE and NSE combined, with 38,83,437 pending on the NSE and 28,13,972 pending on the BSE, even as there are no buyers on both the exchanges.
“The creditors based out of Singapore where we had some credit lines against which we used to get credits. So, it was a USD 10 million line which got pulled up and we were settling our account. So, we have already addressed this matter in the arbitration court where we have been discussing this part,” said Manish Goel, MD, Shilpi Cable Technologies’ interview to CNBC-TV18.
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“No, nothing is going wrong. It is just again a strategy move to overall, to get more new talent on the company side, so it is part of our strategy. It is not like something is going wrong,” Goel said on the issue of multiple resignations in the last one month, adding that these were not voluntary resignations. “The promoter holding entire 41 percent,” Goel clarified on the promoter holding in the company.
On 13 October 2015, the company had issued and allotted 15 million convertible warrants on a preferential basis to Shilpi Cables Private Limited, a promoter group company, at an exercise price of Rs 60/- per underlying equity share of the face value of Rs 10 each, out of which 8 million warrants had been converted into an equal number of equity shares on 28 March 2016. On 12 April 2017, the company reported to the stock exchanges that Shilpi Cables Private Limited had submitted the request for conversion of 7 million of these convertible warrants into equity shares of the company as per the terms of the issue of those warrants.
The board meeting of Shilpi Cable Technologies, which was last scheduled to be held on April 25, 2017, at the registered office of the company was cancelled due to lack of quorum for a second time, after being cancelled for the first time on April 18. The said board meetings were to consider and approve the allotment of equity shares upon conversion of warrants. The board is now scheduled to meet on 28 May 2017, Goel said in the interview.