Garware Polyester

Garware Polyester Ltd has informed that the Board of Directors of the Company have approved the One Time Settlement (OTS) package offered to the Company by Industrial Development Bank of India Ltd(IDBI) vide a Circular resolution dated September 28, 2007.

The OTS package was sanctioned by IDBI vide its letter dated March 15, 2007. Subsequently IDBI modified the said package vide its letter dated August 02, 2007. The main features of the OTS package are as under:

(i) Cut-off-date: January 01, 2007

(ii) Cash payment of Rs 8424 lakh toward principal outstanding of NCDs, Corporate Loan, Zero Coupon Bonds and Negotiated Settlement Amount (Rs 8324 lakhs) and deferred interest (Rs 100 Lakh).

(iii) Conversion of Rs 600 lakh out of deferred interest into equity as per SEBI guidelines.

(iv) Conversion of balance Rs 4954 lakh of deferred interest on NCDs / Corporate Loan into 0.01% Cumulative Redeemable Preference Shares (CRPS). The CRPS would be redeemable in 3
equal annual installments between April 01, 2014 to April 01, 2016.

(v) Waiver of Rs 27.95 lakh payable towards further interest and other charges (liquidated damages).

(vi) In case of default, in redemption of preference shares the same would be converted into equity shares to the extent of the defaulted amount, if the default is not cleared within 90 days at a price to be determined as per the then prevailing SEBI guidelines. The conversion would be exercised in a manner such that (a) IDBI holding at any given point in time would not exceed the aggregate promoter's shareholding in the Company (b) IDBI holding would not exceed 15% of the paid up equity share capital of the Company at any given point in time and (c) the promoters would be offered the right to acquire the converted equity at a mutually acceptable price prior to disposal of the same by IDBI.

In order to implement One Time Settlement (OTS) package sanctioned by IDBI, the Company is required to issue equity shares and O.01% Cumulative Redeemable Preference Shares to IDBI in future.

Accordingly Board has also approved the following proposal subject to shareholders approval to :

a) Increase the Authorised Share Capital of the Company.

b) Issue of such number of equity shares to IDBI Ltd on preferential basis as shall be determined on the relevant date.

c) Issue of 49,54,000 Preference shares of Rs 100/- each to IDBI Ltd on Preferential basis.

d) Convene the Extraordinary General Meeting of the Company for seeking the shareholders approval.