Telecom software maker Subex said on Thursday that current foreign currency convertible bonds (FCCBs) will be exchanged for new FCCBs with a maturity period of five years (2017) and fresh equity.

Subex said that it has launched new FCCBs for Rs 721 crore ($131 million) at 5.7 per cent, which the company hopes will put to rest concerns around the financial stability of the company. It fixed the floor price at Rs 22.79 a share for the new bond issue. The Board has adopted this floor price in respect of the conversion of the new FCCBs, based on the pricing formula as prescribed by the Ministry of Finance, Government of India. The stock today closed at Rs 23.2, a gain of 0.65 per cent over the previous day's close.

FCCBs are a special category of bonds issued in a currency different from the issuing company's domestic currency and is used to expand in overseas markets.

Subex in 2007 had raised $180 million (at 2 per cent) and $98.7 million (at 5 per cent) through FCCBs, that were supposed to mature in March this year. But the company had got bondholders nod to extend the maturity period for the outstanding FCCBs to July 9 from March 9.

In May, the RBI approved the restructuring proposal of its FCCBs involving a combination of debt and equity.

Mr Subhash Menon will step down from the post of chairman as part of the company's effort to recast FCCBs. However, he will continue to be the founder, managing director and chief executive officer, the company said in a notification to the BSE.

(This article was published on June 13, 2012)
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