Subex’s foreign currency convertible bonds (FCCBs) are due on March 9. In an interview to CNBC-TV18, Subash Menon, MD and CEO says, the company has applied to the RBI for extension of the due date from March 9 to July 9. “We are quite confident that the RBI approval will come through. We are expecting that in the next few days," he adds.
Below is the edited transcript of his interview on CNBC-TV18. Also watch the accompanying video.
Q: Can you update us on the FCCBs which are due on March 9? What is the outstanding amount?
A: The overall outstanding amount is USD 94 million of face value. The amount will be USD 131 million in value in all. Not withstanding what is being said in the press and by other agencies like Fitch, we certainly have no intention to default and we will not.
We have a plan in place. We have already applied to the RBI for extension of the due date from March 9 to July 9. That basically is because we have a solution, but that solution will take two-three months to implement. So, we won’t have time to implement that solution.
The most important thing is that we do have a complete solution for the FCCB. There is no question of Subex defaulting on the FCCBs. However, to implement that, it will take slightly longer than the time available until March 9. So, we have requested RBI for an extension from March 9 to July 9.
We are quite confident that it will come through. Once that happens, the bond holders will also approve that in a meeting which has been called on March 6. Once that happens, we'll have adequate time to completely implement the solution.
Q: When will you get the RBI approval to extend the maturity date to July 9? Also, in-principle atleast, have you got the consent from all the lenders to this FCCBs for extending your maturity? Will there be a change in the terms with respect to the outstanding amount or coupon rate or an equity conversion rate?
A: Let me answer the last question first. It'll be absolutely identical. There will be no change. It is just a change in date from March 9 to July 9.
With regard to the RBI approval, I don’t want to take it for granted or anything like that. But we are quite confident that the RBI approval will come through. We are expecting that in the next few days. Probably in the next three-four days, we should have that approval from RBI. That is our expectation.
With regard to the lenders, yes, we have been in discussion with the lenders for the past few months. I was talking about a long-term solution that we are working on. Naturally, the lenders are coming together and they are supporting. So, there is absolutely no reason why they wouldn’t approve an extension from March 9 to July 9. So that should happen as well.
First, RBI approval, we are hoping in the next few days. With regard to lenders, we are absolutely confident they will allow because that is in everybody's interest. Finally, it’s just a change of maturity date and nothing else will change at this point of time.
Subex stock price
On November 27, 2015, Subex closed at Rs 15.37, up Rs 2.37, or 18.23 percent. The 52-week high of the share was Rs 18.35 and the 52-week low was Rs 9.12.
The company's trailing 12-month (TTM) EPS was at Rs 0.43 per share as per the quarter ended September 2015. The stock's price-to-earnings (P/E) ratio was 35.74. The latest book value of the company is Rs 13.01 per share. At current value, the price-to-book value of the company is 1.18.
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