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Essar Shipping to raise share capital

The proposal was to increase in authorised share capital of the company and reclassification of share capital

Press Trust of India  |  New Delhi 

Essar Shipping to scale up third-party cargo

on Saturday said its shareholders approved the proposal to increase authorised share capital to Rs 650 crore from Rs 500 crore at the annual general meeting held yesterday. The proposal to increase the authorised share capital of the company Rs 500 crore to Rs 650 crore dividend into 50 crores) equity of Rs 10 each and 15 crore preference of Rs 10 each of the company was approved by shareholders at the AGM held on December 29, 2017, the company said in filing. The proposal was to increase in authorised share capital of the company and reclassification of share capital and change in Memorandum of Association and Articles of Association of the Company accordingly so that it can convert its debt into equity. On 24 August 2010, Ltd (ESL) had issued Foreign Currency Convertible Bonds (FCCB's) for USD 240 million carrying interest at the rate of 5 per cent per annum payable semi annually. The FCCBs are convertible into fully-paid equity of Rs 10 each of the Company or Compulsorily Convertible Preference (CCPS), at the option of the FCCB holders at conversion price of Rs 91.70 per share at a predetermined exchange rate of Rs 46.94 per USD. The ESL had proposed to issue Compulsorily Convertible Preference (CCPS) to the FCCB holders.

Issuance of CCPS will reduce current borrowings by Rs 1,537 crores with a resultant increase in the Companys net worth. This will also improve the health of the company's balance sheet by reducing the Companys leverage. Considering the option of issuing the CCPS, the share capital of the company was required to be increased and re-classified.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Sat, December 30 2017. 23:48 IST
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