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Our Bureau

Kolkata, Nov. 17 Bharati Shipyard Ltd, which has outstanding Foreign Currency Convertible Bonds (Tranche I) due for redemption on December 13, has not received instruction from diverse FCCB holders for conversion yet.

A senior official of the company on condition of anonymity said that Bharati was still hopeful that conversion would take place in the intervening period.

The last conversion of FCCBs took place during the March quarter, when around 1.63 lakh shares were issued in lieu of FCCBs at a price of Rs 421.94 a share of Rs 10 each, according to the company. This had brought down the outstanding shares to 14 FCCBs with a face value of $0.1 million each.

On December 12, 2005, the company had issued 200 FCCBs in Tranche I and the predetermined conversion price was Rs 421.94.

The current market price of Bharti Shipyard stock is Rs 74 a share. The stock has slid by 21 per cent in the past one month.

It has recovered from its one-year low of Rs 62.60 recorded on October 27 but it is way below the one-year high of Rs 865, reached on January 4 this year.

As conversion has been happening till March this year, overall outstanding position for this tranche has come down considerably to $1.4 million from $20 million.

If the conversion of residual FCCBs does not happen because of sharp fall in the share price, the company will have to pay back $1.4 million to Tranche I FCCB holders.

The company has not made a provision debenture redemption reserve.

Bharati Shipyard’s Tranche II FCCBs, which are due for redemption on December 13, 2010, however, has a much larger outstanding of 469 with a same face value totalling the outstanding at $46.9 million. Its redemption price is also higher at Rs 497.89 a share. The Tranche II FCCB has also not seen conversion this financial year since April 1.

More Stories on : Overseas Borrowings | Shipping/Ports

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