PC Jeweller issues convertible debentures up to Rs 420cr

The board of PC Jeweller has approved the issue of compulsarily convertible debentures (CCDs) for an aggregate amount of up to Rs 420 crore by way of a preferential allotment to DVI Fund Mauritius, the company informed exchanges today.In an interview with CNBC-TV18, company CFO Sanjeev Bhatia said the conversion of debentures into equity is to take place after 18 months and will lead to equity dilution of 5-6 percent."This cost of funds will go down post the issuance of the CCDs," he said.At the end of March 2015, the company had total liabilities of Rs 2,733.4 crore, as opposed to equity capital of Rs 1,990.57 crore.Below is the verbatim transcript of Sanjeev Bhatia's interview with Latha Venkatesh & Sonia Shenoy on CNBC-TV18.Latha: This Rs 427 crore therefore will come at what cost to your company?A: It has some coupon rate but at this point of time we cannot disclose the coupon. The necessary shareholder process is yet to start, so once that process gets approved then we will be able to disclose the details. Latha: Can you tell us when the debentures will get converted after that period. Is it a five-seven-three year debenture?A: As per Sebi rule the tenure cannot be more than 18 months and investor has discretion to do it anytime before 18 months Latha: The conversion price?A: The conversion price is going to be as per Sebi formula. Latha: How much of a dilution will it mean?A: Depending on the conversion price the dilution should be around 5-6 percent. Latha: Will it reduce the overall cost of finance for your company?A: Yes.Latha: By how much?A: I won't be able to give exact figure but it will have a positive impact.Latha: Can you leave us with some idea of what will be your FY17 revenue and earnings growth?A: I will not be able to give any details because we are in a silent period.