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| FCCB conversion in Fame likely |
| BS Reporter / Mumbai Feb 24, 2010, 00:57 IST |
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Fame India, in the spotlight because of a three-way corporate battle, hit the upper circuit for the second day in a row today. The stock, which was gaining steadily since INOX picked up a 51 per cent stake in it, gained 4.97 per cent to end at Rs 90.75 by close of Tuesday’s trade on the Bombay Stock Exchange.
The scrip has seen a lot of speculation in the last 15 days and, today, there were only buyers for the stock. Analysts said the counter would be interesting to watch in the coming days as, at today’s price, it might also see conversion of its foreign currency convertible bonds (FCCBs).
“Fame’s FCCBs are coming up for redemption in April 2011 and this could get converted into equity, given the current run-up in the
Fame stock price,” said a research analyst on condition of anonymity.
Around 60 per cent of the FCCBs are convertible at Rs 90 a share and the remaining at Rs 107 a share. Fame’s equity dilution post the FCCB conversion would be about 27.5 per cent.
“With Fame going beyond Rs 90 today, holders of FCCBs might convert them, which would lead to a dilution of INOX’s holding in the company,” said an analyst.
An INOX spokesperson did not comment on the likelihood of its stake reducing in Fame.
Reliance MediaWorks and INOX Leisure have been in a war of sorts over buying out Fame. A Fame deal would ensure Reliance MediaWorks’ domination in the exhibition space with 337 screens in India. Currently, it has 242 screens.
The deal is important for INOX, too, as the Fame deal would take its total screen tally to 205, inching closer to Anil Dhirubhai Ambani Group’s BIG Cinemas.
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