Mahindra advances FCCBs conversion period to 2010

Auto major Mahindra & Mahindra (M&M) today said it has advanced the period for redeeming the outstanding Foreign Currency Convertible Bonds (FCCBs) worth $141.2 million to this year from earlier April 14, 2011.

"M&M today issued a notice for early redemption of its outstanding FCCBs of $141.2 million and setting the last date for conversion of FCCBs into shares/GDRs to October 29, 2010, and balance outstanding FCCBs after conversion, if any, will be redeemed on November 8, 2010," the company said in a filing to the Bombay Stock Exchange.

The utility vehicle major had issued FCCBs worth $200 million in April 2006, each having a face value of $1,00,000, it added.

Out of the total issue, the company had bought back bonds worth $10.5 million, while FCCBs worth $48.3 have been converted into shares/GDRs during the last three months.

"In the last 12 weeks, the bonds have started converting, as they are in the money by a huge margin. We trust, the given current market price, the bond holders would find it valuable to convert their holding into M&M shares/GDRs," M&M Executive Director and Group CFO Bharat Doshi said.

M&M had decided the conversion price at Rs 461.02 a share with a fixed exchange rate of Rs 44.42 per dollar. However, the company has the right to call the bond after two years if the share price is more than 120 per cent of the conversion price for a consecutive 30 trading days.

"The company's share price has been trading consistently higher than 120 per cent for last 12 weeks and currently share price of the company is Rs 725.70 and the USD/INR is 44.30," the filing said.