Strategy
India convertibles monthly
Educomp Solutions refinances while Moser Baer seeks to restructure. While
prominent companies (like JSW Steel and Tata Motors) paid up their FCCB obligations
without much ado, restructuring proposals (for Moser Baer) and extension of
redemption dates (for Suzlon and Gemini Communication) marred issuers at the other
end of the spectrum.
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link :http://www.kotaksecurities.com/pdf/indiadaily/indiadaily19072012lu.pdf
FCCB activity – previous and upcoming
The restructuring and refinancing activity in the FCCB landscape continues as Educomp Solutions
gets added to the list of issuers who have managed to raise funds to pay off their FCCB
obligations. The likes of Financial Technologies, Orchid Chemicals, Reliance Communication, JSW
Steel and Rolta India are few of the issuers who have successfully tapped the ECB route during the
year. On the restructuring front, Moser Baer seeks to restructure its FCCB obligation (two tranches
which were due in June 2012) as it convenes a bondholder meeting in August 2012. Gati, 3i
Infotech and Subex are few Indian issuers who have managed to restructure and roll over their
FCCBs last year. While Suzlon postponed the maturity date of two tranches from June 12, 2012 to
July 27, 2012, Gemini Communications extended its maturity date by three months (to October
18, 2012). In a move to assist the current scenario, the RBI has extended the FCCB buyback
window till March 2013 and revised the norms for pricing the buyback.
FCCB universe – Tata Steel and JPA have FCCBs maturing in September 2012
In terms of prominent issuers, Tata Steel and JPA have FCCBs worth US$382 mn and US$354 mn
respectively in September 2012. Plethico Pharma, GTL Infrastructure and SUEL’s June 2012 tranche
continue to trade at heavy discounts. While Prime Focus is currently trading at a maturity multiple
of 1.4X (redemption value/CB price), Shiv-Vani Oil & Gas Exploration is yielding 28% for its FCCB
maturing CY2015E.
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