Castex Technologies, subsidiary of auto component major Amtek India, is facing resistance from its convertible bondholders. These bondholders are the owners of the USD 130 million, 6 percent bonds due in 2017.
The bondholders have complained to Securities and Exchange Board of India (Sebi), and stock exchanges Bombay Stock Exchange (BSE) and National Stock Exchange (NSE ) on the unusual stock price movement in June and July 2015 ahead of the mandatory conversion of bonds.
Foreign funds have alleged the share price was inflated by company shareholders to ensure mandatory conversion of bonds between June 19 and July 13 this year. The foreign funds have sought action against mandatory conversion of the bonds to shares.
A detailed email query and reminder to company executive Gautam Malhotra went unanswered. NSE also did not respond to the outcome of the complaint.
Castex Technologies had given a mandatory conversion notice to bondholders on July 31. The notice sought to convert nearly USD 80 million of the USD 130 million, 6 percent convertible bonds due in 2017.
The notice also sought to convert 404 bond units into 3.93 crore shares at a conversion price of Rs 103. Castex had stated that the closing price for each of the 30 days prior to conversion notice was at least 130 percent of the principal amount and this was one of the condition that triggered issuance of mandatory conversion notice.
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