IFCI Updates

In terms of the restructuring, a part of bonds held by FIs & Banks, amounting to Rs 1479 crore, was converted into Zero Coupon Optionally Convertible Debentures/ Bonds (ZCOCDs) w.e.f. April 01, 2002. Accordingly, a special resolution, under section 81 of the Companies Act, 1956, was passed by the shareholders of the Company at the Annual General Meeting held on September 12, 2003. As per the resolution, these Zero Coupon Optionally Convertible Debentures/ Bonds are convertible into equity at anytime after five years from the date of issuance, at the option of the holder, at a price to be determined in accordance with the prevailing pricing norms under SEBI (Disclosure & Investor Protection) Guidelines, 2000 at the time of such conversion.

Recently, a meeting of FIs and Banks holding ZCOCDs was convened on October 11, 2007 under the lead of Ministry of Finance, Government of India followed by another meeting held on November 07, 2007 where, the Banks proposed to convert 100% of their Zero Coupons Optionally Convertible Debentures/ Bonds into equity and LIC & other Insurance Companies desired to convert as much of their ZCOCD-holding as would be require to maintain their existing equity holding percentage, post dilution of equity.

The Board of Directors of the Company at its meeting held on December 01, 2007, has approved, in principle, the conversion of the ZCOCDs into equity and constituted a Committee of Directors for such conversion and compliance of such regulatory requirements, as required. Accordingly, ZCOCDs amounting to about Rs 1,300 crore would be converted into such number of equity at a price to be determined in accordance with the prevailing pricing norms under SEBI (Disclosure & Investor Protection) Guidelines, 2000. For determination of price, December 17, 2007 has been fixed as the relevant date. The proposed equity shares would be issued on pari passu basis with the existing equity shares of the Company. The exact number of equity shares proposed to be issued on conversion would be determined after the relevant date i.e., December 17, 2007.