Mumbai, June 18
Indiabulls Financial Services Ltd today announced that it would be allotting convertible and non-convertible preference shares worth Rs 644 crore to Oberon Ltd.
Oberon Ltd is a special purpose vehicle wholly owned by Farallon Capital Management LLC, according to a Indiabulls release.
The convertible preference shares are convertible at a price of Rs 300 into 1.15 crore shares of Indiabulls and bear a dividend of five per cent, for a total consideration of Rs 345 crore.
The conversion price of Rs 300 is at a premium to the closing price of Indiabulls shares on the stock exchanges in the last trading session of Friday, the release said.
Non-convertible pref shares
The non-convertible preference shares will be allotted for a total consideration of Rs 299 crore and carry a dividend of five per cent a year for the first 18 months and then 10 per cent a year for the next 18 months.
The transaction is subject to the approval of shareholders of Indiabulls.
Following the allotment of shares to Oberon, the consolidated net worth of Indiabulls will increase to Rs 2,400 crore.
The company has 16.14 crore shares outstanding and will issue an additional 1.15 crore shares upon conversion of the convertible preference shares into common equity, the release said.
The first investment of Farallon in Indiabulls Financial Services happened before the company's IPO.
Farallon had bought equity shares of the company at Rs 25 a share in February 2004.
The Indiabulls scrip ended at Rs 259.5 on the BSE on Friday, up from the previous close of Rs 230.
The company also expects the demerger of Indiabulls Real Estate Ltd, its real estate undertaking to be completed in calendar 2006, subject to necessary approvals from authorities, the release added.