Shanthi Gears Redeemed the entire FCCB
Coimbatore -based Shanthi Gears, India’s leading industrial gear and gearbox manufacturer, last week redeemed the entire outstanding foreign currency convertible bond (FCCB) of $ 5.3 million last week. The company informed BSE the FCCB bondholders had exercised redemption option and paid back the issue along with interest. In 2005, the Rs 244.1 crore company had issued FCCBs to the tune of $10 million for capital expansion and buying machineries. Of this, $4.7 million was converted into equity shares as per the terms of the issue,” a company source told . The officials added that the call or put option had to be done within three years and the deadline was Nov 14, 2008.“In the current market situation when the Rs 1 share of Shanthi Gears is selling at Rs 34 compared to the issue price of Rs 58.35, the investors opted for redemption,” the officials said. The redemption was done rupee depreciated to Rs 50.0875. “So we will have to book the difference as loss . Since since we are doing well, we hope to offset it with profit of this year,” company sources added. It hasn’t raised any additional debt as it was anticipating the redemption obligation.
