The Hindu Business Line : Nagarjuna Construction cancels warrants to promoter’s firm

Hyderabad, Sept. 17 Nagarjuna Construction Company Ltd (NCC) cancelled the 2.5 million warrants allotted to its promoter group company, AVSR Holdings Ltd as it failed to convert the warrants into shares.

The allotment was made in February 2007 with an option to convert the warrants into shares at Rs 217 a share within 18 months by paying 10 per cent of value upfront.

As the promoters’ group had failed to pay the balance on expiry of warrants in August 2008, the warrants were cancelled, the Hyderabad-based company informed BSE.

The upfront payment made by AVSR Holdings to NCCL was forfeited.

According to analysts, the cancellation of warrants could have a negative impact on the company as it deprived the infrastructure major of Rs 261 crore cash flow.

Further, it is speculated that 9.1 million warrants issued to Blackstone Group at Rs 225 a share may not actually be converted into shares due to the difficulties in getting approval from Foreign Investment Promotion Board.

It had also not paid the 10 per cent mandatory upfront payment.

The stock of NCCL declined 0.57 per cent on the BSE on Wednesday and closed at Rs 112.45.

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