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Our Bureau

Hyderabad , May 17

THE Appellate Authority for Industrial and Financial Reconstruction (AAIFR) has finally sanctioned the rehabilitation scheme for Pennar Profiles Ltd.

Accordingly, the Pennar Profiles board, at a meeting on Monday, took on record the rehabilitation scheme approved by the AAIFR and directed the company to implement the scheme.

As per the rehabilitation scheme, the company has to enter into a one-time settlement (OTS) with IDBI, IFCI, ICICI, SBI and SBH. The OTS involves payment of 53 per cent of the outstanding principal amount and non-convertible debentures.

The financial institutions and the banks have agreed to waive the balance 47 per cent of the outstanding loan principal amount and non-convertible debentures, along with the entire interest due, including simple and compound interest and liquidated damages, the company informed stock exchanges on Tuesday.

In terms of the scheme, the company has to reduce its paid-up share capital of Rs 5.48-crore (consisting of 54.85 lakh equity shares of Rs 10 each) to Rs 2.74 crore (consisting of 27.42 lakh equity shares of Rs 10, each fully paid up). For every 100 equity shares of Rs 10 each held, the shareholders will be issued 50 equity shares of Rs 10 each and the balance 50 shares will be cancelled.

The company will have to issue 75 lakh equity shares of Rs 10 each at par to foreign investors on a preferential basis and 21.54 lakh shares of Rs 10 each at par to the present promoters in lieu of the unsecured loan of Rs 2.15 crore provided by them. These shares will have to be issued after the reduction of the existing share capital.

In terms of the rehabilitation scheme, the company has to issue to the foreign investor 34.24 lakh cumulative, redeemable and optionally convertible preferential shares for Rs 3.42 crore, carrying a coupon rate of 10 per cent a year. These preference shares will be redeemed at the end of fifth, sixth and seventh years from the date of subscription in the ratio of 33 per cent, 33 per cent and 34 per cent, respectively.

Further, the foreign investor will have to provide a loan of euro 1,84,190 (Rs 1.05 crore) to the company (at the London Interbank Offer rate + 2 a year), the interest being payable on a half-yearly basis. The company has to repay the principal in eight half-yearly instalments after a two-year moratorium.

The company will also get benefits under the Income-Tax Act available to sick industrial companies for rehabilitation. It will get exemption from the applicability of the Companies Act and SEBI rules on the reduction of capital and issue of fresh equity shares and cumulative preference shares, the company said.

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