Krishna Filaments Plans Rs 53.52cr Debenture Issue

According to the draft prospectus filed by the company with the Securities and Exchange Board of India (Sebi), for the equity option, each OFCDD will be optionally converted into one equity share of Rs 10 each at the end of 17 months from the date of allotment, at a price of 33-and-a-half per cent discount to the average of daily closing prices at the Bombay Stock Exchange for the previous six months from the record date prior to conversion.

This will be subject to a maximum of Rs 200 per share and minimum of Rs 10 per share. The conversion will be subject to OFCDDs being fully paid. If the conversion price is below Rs 200 per share, the balance will be carried forward as 19 per cent non-convertible debentures (NCDs) to be redeemed in three equal instalments each at the end of 36, 48 and 60 months from the date of allotment of OFCDDs.

If the investor opts for the NCD option, then the OFCDDs can be converted into 19 per cent non-convertible debentures of Rs 200 each to be redeemed in three equal instalments each at the end of 36, 48, and 60 months from the date of allotment of OFCDDs.

The company board will reserve the right to redeem the NCDs in the above cases earlier, but not before the expiry of 24 months. It will also fix a cut off date in the 16th month from the date of allotment for holders of OFCDDs.

The holders on the register of OFCDDs as on the record date will be sent notices to exercise their option.

The yield being offered till the date of conversion is in the form of the discount of Rs 40 at the time of the public issue. It works out to a simple return of 25 per cent for 17 months or 17.6 per cent per annum. After the date of conversion into carry-forward NCD, the return to the investor would be 19 per cent per annum payable half-yearly.

The company is raising money to part-finance its Rs 184.49-crore expansion project for manufacture of 3 strand ropes, 8 strand ropes, twines and specialty nets.