Business Daily from THE HINDU group of publications
Saturday, Dec 27, 2008
ePaper | Mobile/PDA Version | Audio | Blogs
Business Daily from THE HINDU group of publications Saturday, Dec 27, 2008 ePaper | Mobile/PDA Version | Audio | Blogs |
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Corporate
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Overseas Borrowings Markets - Buyback 
Our Bureau New Delhi, Dec. 26 Pharmaceutical company Jubilant Organosys Ltd on Friday said its board has decided to explore opportunities to buy back its foreign currency convertible bonds (FCCBs). The company, in a stock exchange notice, said this follows the Reserve Bank of India’s decision earlier this month to ease FCCB buyback rules. The company didn’t provide any other details. According to the company’s annual report for the year 2007-08, Jubilant has issued FCCBs in 2004-05 to raise $35 million, in 2005-06 for $75 million and another one to raise $200 million in 2006-07. Buyback normsOn December 6, the RBI had allowed firms to buy back foreign currency convertible bonds prematurely through rupee resources. However, for buying back these bonds through rupee resources, certain conditions have to be met. One of the conditions is that there has to be a minimum discount of 25 per cent on the book value. Besides, the amount of buyback is limited to $50 million of the redemption value per company and the resources for buy back are drawn out of internal accruals of the company. A number of other companies have indicated plans to buy back FCCBs issued by them. This includes Reliance Communications, GTL Infra and Aurobindo Pharma. While FCCBs have helped Indian companies, especially pharma firma, in growing their businesses, it has become a serious concern post the slide in their share prices. More Stories on : Overseas Borrowings | Buyback | Pharmaceuticals
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